All business transactions follow contracts, but sometimes, one party fails to satisfy its contractual obligations — for example, a failure to pay for a delivery of goods. In order to make a financial recovery, the aggrieved business may have no other recourse than to file a lawsuit against the nonpaying entity. However, even if the plaintiff wins the lawsuit, that doesn’t necessarily guarantee the defendant will pay as ordered by the judge.
If the defendant does not voluntarily pay, the plaintiff will have to take additional steps in order to collect the judgment. But what if the defendant is located in another state? If your business is located in New Jersey, and you are trying to collect a judgment from an out-of-state entity, you will need to go through the process of domesticating the judgment first.
The experienced business attorneys of The Jayson Law Group LLC can both keep this process as efficient as possible, and assist your business in collecting the judgment once it has been made enforceable. Whether you represent a sole proprietorship or a large corporation, we can help. To schedule a private legal consultation, call our law offices at (908) 258-0621.
How to Domesticate a Judgment in New Jersey
When you win a lawsuit, a judgment is entered in your favor, and the defendant must then accept the court’s ruling and pay this judgment as ordered. Unfortunately, this is not always how the process unfolds. The defendant may deliberately fail to pay for any number of reasons, but whatever the underlying issue, one fact remains the same: if the defendant is not located in New Jersey, you will need to domesticate the judgment before you can enforce it and finally obtain the payment you are owed. This process is governed by NJSA 2A:49A-25, or the Uniform Enforcement of Foreign Judgments Act.
Step 1 — You need to obtain an authenticated (also called “exemplified”) copy of the judgment of the foreign court, including the issuing court’s seal. (Note that in this context, “foreign” simply means outside of New Jersey.)
Step 2 — Your attorney will provide the following information to the court clerk with an affidavit:
- The name and address of both debtor and creditor.
- The amount of the judgment, as well as the date it was entered.
- Is there still time for the judgment to be appealed in the foreign jurisdiction? Did the foreign court grant the debtor a stay? Was the judgment specifically a default judgment? If the answer to the last question is yes, your attorney will also submit the related information. (A default judgment means that the defendant failed to respond to the original complaint.)
Step 3 — The judgment will be recorded and written notification will be delivered to the debtor. From this point, the debtor has two weeks to raise an objection. If he or she fails to do so, the judgment will be entered and henceforth treated as if it were domestic.
It should be noted that there is a $35 filing fee to process the affidavit.
Enforcing a Domestic Judgment
Now that you’ve completed the process of domesticating your judgment, you can move on to actually enforcing it. However, enforcement has its own requirements.
To begin with, you must have access to certain information about the debtor’s income and assets. For example, does he or she have a savings or checking account (to which a bank levy may be applied)? What about personal property (which may be subject to a lien)? Where does he or she work (for purposes of wage garnishment)?
If you do not know the answers to these questions, you can find out with the help of something called an information subpoena, which is simply a sheet of questions concerning matters such as the judgment debtor’s banking account and salary. If the information subpoena fails, you may use an alternative called a post-judgment discovery.
Once you are equipped with the information you need, whether obtained via discovery or a subpoena, you can proceed with the most appropriate means of collection. Depending on the debtor’s financial situation, you may be able to:
- Collect a portion of the debtor’s paycheck through wage garnishment, provided he or she is earning at least $217.50 per week.
- Complete a writ of execution in order to get a bank levy, which will result in a freeze on the debtor’s bank account.
- Apply for a court order allowing the sheriff to enter the debtor’s property. Once the application is granted, the sheriff can physically seize certain parts of the debtor’s property (e.g. vehicle repossession) and put them up for sale at an auction.
If you have been struggling to enforce and collect a judgment which has already been entered in your favor, a New Jersey business lawyer can help you secure what you’re owed. To set up a confidential case evaluation, call The Jayson Law Group LLC at (908) 258-0621, or contact us online today.