If you don't pay your credit card bills, the charges don't just go away. The credit card company will attempt to collect its debt, and may even sue you. In New Jersey, after a credit card company successfully sues a debtor, it must attempt to collect the judgment on its own before asking the court to take further action against the debtor.
Contact Debtor
After the court enters a judgment, the plaintiff must contact the debtor to attempt to collect the debt. The creditor must inform the debtor of the amount of the judgment and attempt to make payment arrangements. If the debtor cannot pay back all the debt at once but is willing to pay it off in installments, the creditor may accept installment payments. If the debtor refuses to make arrangements or the creditor cannot reach him, the creditor may then go back to court to ask for help.
Wage Garnishment
The court may issue an order of wage garnishment against the debtor's wages from her current employer. The creditor sends a form to the employer that the employer must return, confirming that the individual works there and listing the employee's gross income per pay period. The court will then order the employer to withhold a portion of the employee's post-tax pay to pay the debt. As of 2011, New Jersey limits wage garnishments to 25 percent of the employee's income or 250 percent of the federal poverty guideline for that employee, whichever is smaller.
Bank Levy
If the creditor knows the name, address and account number of a savings or checking account where the debtor has funds, she can request that the court levy the bank account. If the court agrees to this, it contacts the bank with an order to freeze funds. This means the bank must not make funds equivalent to the amount of the judgment available for the debtor's use. Once the bank freezes the funds, the creditor must file a motion to turn over funds with the court and give a copy to the debtor and the bank. Once the court signs this order, the bank must give the creditor the frozen funds.
Exempt Funds
When levying a debtor's bank account, creditors must leave certain funds alone. Creditors may not seize child support, welfare or Social Security benefits. They also may not touch veteran's benefits or unemployment benefits.
Payments and Fees
As of 2011, the fee for court collection activity in New Jersey is $5 plus mileage for each trip a court officer makes in conjunction with the attempt to collect a debt. In addition, the court must receive 10 percent of any payments it collects on the creditor's behalf. Even if the creditor and debtor settle out of court after court action begins, the court still must receive 10 percent of payments. Most judgments add the 10 percent commission to the total the debtor must pay, which covers this fee.
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