Disclaimer: Steven A. Jayson, Esq. has joined the Law Offices of Alan Ackerman located at 1719 Route 10 East, Suite 106, Parsippany, New Jersey 07054. He can still be reached by calling (908) 258-0621 or filling out the contact form on this website.
By joining the Law Offices of Alan Ackerman, Steven A. Jayson, Esq. is able to continue to offer clients the same services at the Jayson Law Group, but now backed by over 40 years of legal experience.
When two businesses enter into a transaction, the expectation is that both will satisfy their contractual obligations. However, that is not always what happens. All too often, one party lives up to their end of the bargain — only for the other party to neglect their responsibilities. When you are deprived of a payment which you were expecting based on a contract or business agreement, the financial void the debt creates can have disastrous effects on your entire enterprise. For the creditor, an unpaid debt can lead to lowered productivity, interrupted daily operations, and strained relationships with their other clients and consumers.
Fortunately, if a business in New Jersey owes you money, there are several different ways you can make a financial recovery. An aggressive commercial collections attorney can help. To schedule a confidential legal consultation, call The Jayson Law Group LLC at (908) 258-0621 today.
Filing a Debt Collection Lawsuit
If you’ve been struggling to be compensated for goods or services already rendered, but have not had any success, it may be time to file a lawsuit in order to recover the debt you are owed. So how do you sue a business in New Jersey?
- Step 1 — Serve the business with a summons and complaint. The summons is a directive to appear at a scheduled court date, while the complaint explains the allegations you are making against the defendant.
- Step 2 — The company may or may not respond with an answer within the 35-day time limit. If it does respond, be advised that its answer may include a counterclaim against you. If it does not respond, a default judgment may be entered against the defendant. If the defendant, or judgment debtor, does not pay the debt as ordered, you may be able to take further actions to collect the judgment, as discussed in greater detail below.
- Step 3 — If the company responds with an answer, you will go through the Discovery phase, which involves questioning, gathering evidence, and compiling information for the trial.
- Step 4 — Unless ADR (Alternative Dispute Resolution) proves effective or the case is settled or dismissed, you will go to trial to try and prove you are legally in the right (e.g. the defendant breached their contract).
After the Lawsuit Ends: Enforcing and Collecting the Judgment
You prevailed in court, and the defendant was ordered to pay you a certain amount of money by a certain point in time. You thought that would be the end of the matter, yet you still have not received the payment that was ordered by the judge. Now what do you do?
There several different methods of collecting a judgment after litigation. Depending on the specific details of your case, some of these methods may be more appropriate than others. You may wish to utilize:
- Bank Levies
- Judgment Liens
You may be thinking that if your judgment debtor is self-employed through a sole proprietorship, you may be able to garnish his or her wages. However, it should be noted that in New Jersey, wage garnishment is typically ineffective against self-employed judgment debtors. Bank levies and judgment liens are generally stronger options.
How to Collect a Judgment with a Bank Levy
Levying a bank account essentially means you are freezing your judgment debtor’s account, which allows you extract the funds to which you are entitled. How do you use a bank levy to collect a judgment in New Jersey?
- Step 1 — Obtain and complete a Writ of Execution. A Writ of Execution is a short form which asks you to supply information like the judgment amount and any additional costs or interest.
- Step 2 — Send the completed Writ to the Civil Division Manager in the county where the case was originally filed.
- Step 3 — Send the issued Writ to the sheriff in the county where the judgment debtor’s bank is located.
- Step 4 — The sheriff will contact the appropriate bank.
- Step 5 — The bank will freeze the judgment debtor’s account.
- Step 6 — File a Motion to Turn Over Funds with the court.
- Step 7 — Serve a copy of the Motion to Turn Over Funds to the sheriff, the judgment debtor, and the bank.
- Step 8 — Unless the debtor objects and requests a hearing, the judge will sign his or her approval.
- Step 9 — Send the signed order to the sheriff, the judgment debtor, and the bank.
- Step 10 — The sheriff can take money from the judgment debtor’s account on your behalf.
In accordance with R. 4:60-7, “The sheriff shall make the levy within 30 days from the date of the writ.”
Attaching a Judgment Lien to a Debtor’s Real Estate
When a claim is brought in the Law Division of the Civil Part, which handles claims involving monetary damages in excess of $15,000, judgment liens are created automatically. If a claim is brought in the Special Civil Part, which handles small claims and claims involving monetary damages up to $15,000, the claim needs to be docketed in the Law Division before a judgment lien can be created. As the judgment creditor, you can then attach this lien to any piece of the judgment debtor’s real property. If the property is sold at any point during the next two decades, you can theoretically collect proceeds from the sale, provided those proceeds are not exhausted by other creditors with judgment liens predating your own.
If a company owes you money in New Jersey, you deserve to be paid. Settling your accounts can mean the difference between formation and dissolution. To arrange a private consultation with an experienced business debt collection lawyer, call The Jayson Law Group LLC at (908) 258-0621.