If you are in financial difficulty, then debt collectors are probably at you constantly with threats of imminent imprisonment, wage attachment, bank levy, and seizure of personal property. The biggest thing to bear in mind here is that if a collection agency (as opposed to a law firm) is telling you this, it is a lie! They are just playing on your ignorance of the law and your fear.

In New Jersey, things like wage executions and bank levies do not happen until suit has been brought against you, and a judgment has been entered. This process can take months, so the nastiness the debt collector is threatening is far from imminent. Here's what has to happen.

First, the collection agency has to throw in the towell on trying to collect it themselves and refer the claim to a lawyer for suit. This is something they are reluctant to do, because it means that they get less of a fee (they have to share it with the law firm). However, if they do not do this, all of those nasty consequences with which they are threatening you will not happen.

This can take up to 30 days to happen (send out the claim, law firm receives and reviews, then opens a file). If the law firm then sends out a demand letter prior to suit, that can mean up to 30 days more.

Second, the lawyer files a lawsuit against you. Contrary to what many people may believe, if you are sued, you will know it (unless you throw out your mail without opening it or never answer the door).

Once you receive it (a document called a "summons and complaint"), you have 35 days in which to file an answer with the court and copy the creditor's attorney. At this point, you should consult with a lawyer, as you may have defenses to this lawsuit that would either void the debt if successful or reduce the amount significantly.

Third, if you do not file an answer within that time, the lawyer will enter a judgment against you. It is this judgment that allows for the levies and such and, if the proper paperwork is filed, can also act as a lien against your home, requiring payment if you go to refinance or sell it.

The process of entering that judgment, depending on the speed and efficiency of the law firm and the court clerk's office, can take another 30 days or so.

What happens after that depends on how much the creditor knows about your assets. Do they know where you work? Do they know where your bank accounts are?

So What Do I Do?

Want more information on how to fight back with your creditors and not fall victim to their fear tactics? Then download my free book, The Biggest Secrets Your Creditors Don't Want You to Know. Become empowered and protect your rights!

If you live in southern New Jersey and want a lawyer to represent you against your creditors, call my office at 856-432-4113 or contact me through this site to schedule an appointment to come in. I have represented creditors for many years and am familiar with the collection industry and how it ticks. Put my experience to work for you!

If your debt situation goes beyond one or two creditors, however, and you are wondering whether you need a solution to a bigger problem, then download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey to find out if bankruptcy might be the solution.

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.