by Bari Gambacorta, Esq.
When collecting an out-of-state judgment against a New Jersey resident or a corporation doing business in New Jersey, it is relatively easy to obtain a docketed New Jersey judgment by virtue of N.J.S.A. 2A:49A-25, et. (the “Act”). The process, which involves notice to the defendant, only takes three to four weeks. On the rare occasion that the defendant objects, the process becomes only slightly more complicated.
Once a judgment has been docketed in New Jersey pursuant to the Act the collection process begins in earnest. The law firm of Stark & Stark is armed with collection resources, is well-versed in collection practices, has years of collection experience and uses the following available post judgment procedures that become available once an out-of-state judgment is docketed in the state of New Jersey:
The Levy. If a defendant has any personal items of value or open bank accounts after a judgment has been properly docketed, the sheriff can be instructed to proceed forward and levy upon these. Once the levees have been perfected, physical items can be sold at auction and a creditor may file a motion for turnover with the court normally resulting in a hearing, followed by the payment of funds to the creditor.
Wage Execution. If a judgment was made against an individual, the most certain and effective way of collecting the debt is by way of wage execution. If notice is served and the defendant fails to object within, an order is entered and then served upon the employer who must then remit 10 percent of gross wages per payday to the sheriff for garnishment, provided the individual’s wages are above the minimum level of $217.50 per week.
Receivership. If an entity is not paying debts to other creditors, it may be possible to appoint a court ordered receiver. It would be his/her duty to liquidate the assets of the corporation and make payments to all creditors.
Charging Order. If the defendant is a member of a New Jersey Limited Liability Corporation (LLC), a motion can be filed in Superior Court against the LLC seeking an accounting of any amounts paid or payable to the defendant as well as supporting orders restraining those payments and/or directing them to the creditor.
Information Subpoena. A creditor may serve either individual or business information subpoenas after a judgment is docketed. Forms for individuals may not be varied as its contents are set forth in the Appendix to the New Jersey Superior Court Rules, and likewise the form for business entities was approved by New Jersey Supreme Court. If the defendant is served with the information subpoenas and does not respond and fully complete subpoenas within 10 days, the creditor may apply to have the individual or the principal of the entity held in contempt, sanctioned and/or arrested.
The content contained in these information subpoenas is very helpful for the aforementioned collection strategies, including the name of the business and all of its trade names; contact information for all stockholders, officers directors and partners; the names, addresses and telephone numbers of all businesses which the principles have an interest; all bank account numbers; the current location of all books and records of the business; the name and address of the person who prepares the business records; a list of the physical assets of the business and their locations; details on any owned real estate including the names in which they are owned and the property addresses; and a list of all motor vehicles owned including make, model, year and license plate.
The subpoena requires the defendant to state the transfer of business assets occurring within six months of the date of the information subpoena; additionally, if it is alleged that the business is no longer active, the defendant must list the date of its cessation and the assets held as of that date. Deponents must state the nature, application and parties named in any pending litigation.
Post Judgment Deposition. After a judgment is docketed the creditor can seek a post judgment deposition of the debtor and/or the debtor’s related entities as well as any third parties including accountants, suppliers, customers or any other individual or business with relevant information.
While other measures exist, those listed above are suggested for post judgment procedures available once an out-of-state judgment is docketed in New Jersey. It can be highly frustrating for a creditor to chase down a defendant into another jurisdiction; however, in the hands of proper collection counsel New Jersey has an adequate arsenal of tools to collect an out-of-state judgment’s balance.
For more information contact Bari Gambacorta at Stark & Stark by e-mail at email@example.com or by phone at 609-896-9060.