Debt Collection Defense




In this recessionary economy, more and more people are “falling behind” on their bills. If you’re more than 90 days past due on a credit card or medical debt in New Jersey, chances are excellent you’ll soon be receiving a lawsuit in the mail from a collections firm, probably Pressler and Pressler of 7 Entin Road in Parsippany, NJ. We have defended and defeated this firm and others in NJ Collection Matters throughout New Jersey. Often the plaintiff in the case will NOT be the original creditor, but rather a “junk debt buyer” such as Midland Funding LLC, New Century Financial, Cavalry LLC or another such “middleman,” who likely bought your credit card or consumer debt for just pennies on the dollar !

The law firm of Pressler and Pressler are undoubtedly the biggest (and most infamous) collection law practice in New Jersey. They represent Discover Card/Discover Bank debts, as well as several large NJ hospitals. Other large debt collection outfits in NJ include Goldman & Warshaw, Sklar-Markind, and several other firms who specialize in collections lawsuits.

Typically, you visit the mailbox one day (or hear a knock on the door from the mailman) to find you’ve received a piece of certified mail from a collections firm. Usually you’ve had about 12,000 or so telephone calls prior to being sued (some of which may have violated the Fair Debt Collections Practices Act. )The lawsuit has usually been filed by the collector in NJ Special Civil Part, which I like to call “small claims court on steroids.” Here’s why:

NJ Special Civil Part is a high volume “rocket docket” type of court, in which the goal is to resolve claims of $15,000 or under quickly. From the collector’s perspective, the best part about Special Civil claims is that the collector need not show up in Court to receive a default judgment in the event you do not answer the Complaint. If more than 35 days pass without your filing an Answer, the Court itself simply enters a default against you. And once the collector has a default judgment, they can then “move forward” with some very unpleasant steps to enforce their judgement. More on that below.

Obviously, the #1 biggest mistake you can make when served with a Special Civil Part complaint by Pressler or a similar collections firm is to do nothing. If you fail to act/respond, then 35 days from the date you’re served, the Court will automatically enter a default against you. This will result in a judgement in favor of the collector for the amount claimed owed in the Complaint. The collector can then use the legal system to try to involuntarily collect from you, in several ways:

1. The judgment may be “docketed” in Trenton, NJ as a judgment lien against any real estate you own in NJ. This means that when you go to sell your home or land, you’ll have to settle up in the amount of the judgement lien before you can close title/sell your property.

2. Wage Garnishment: Pressler and Pressler in particular are quite aggressive about seeking wage garnishments. Under NJ Law, they may garnish (a) 10% of your gross salary when the same shall equal or exceed the amount of $217.50 per week; or (b) 25% of your disposable earnings for that week; or (c) the amount, if any, by which your disposable weekly earnings exceed $217.50, whichever shall be the least. Disposable earnings are defined as that portion of the earnings remaining after the deduction from the gross earnings of any amounts required by law to be withheld. In the event the disposable earnings so defined are $217.50 or less, no amount shall be withheld under this execution.

3. Information Subpoena: The collector may serve you what is called an “information subpoena,” to which you are obligated under NJ Law to respond to. This subpoena asks questions about your assets, i.e, cars, trucks, business equipment, bank/savings accounts, etc. They do this so that they can learn what assets you have that could be seized to satisfy the judgment. You are required by law to respond to the information subpoena.

4. Bank Levy:  If the collector learns via the Information Subpoena or otherwise that you have open NJ checking or savings accounts, they can execute what is called a “writ of execution.” The collector fills out court paperwork that informs the county sheriff which bank you use and what your account number(s) are. The sheriff then visits your bank with the writ and the manager is compelled by law to pay the judgement amount out of your account’s funds. Typically the debtor first learns this has occured when they go to pay a bill or make an ATM withdrawl and see their balance has drastically shrunk!

So what can one do to fight off these people, you might ask?

First, you need to ANSWER the collections complaint within 35 days of the date on the Summons (which is the “cover page” of the Complaint- this is a paper that reads “YOU ARE BEING SUED.”

In the Answer, you either admit or deny the allegations made in the numbered paragraphs of the Complaint. The Answer needs to be filed with the Court (there is a $15 fee to file your Answer), and also served via certified and regular mail on the collections firm.

Along with filing the Answer, my office serves Interrogatories on the collector as well. “Interrogatories” are written questions which must be answered by the collector under oath, or else their lawsuit may be dismissed.

One of my favorite interrogatory questions pertains to the “assignment of debt.” You see, the corporation or entity suing you may not be the original creditor to whom you owed the debt. Believe it or not, there is a thriving market trading in “bad debt.” Investors can form a company and purchase “blocks” of bad debt from credit card or other companies for pennies on the dollar (typically three to ten cents on the dollar). This is called an “assignment of debt,” and basically means the original creditor has sold its right to collect to another party, who are now filing suit to recoup their “investment.” We often see debts assigned from GE Consumer Credit/Loews to third-party collection agencies, and also hospital debt as well (especially debts due for emergency room visits).

However, the party bringing the suit is nevertheless obligated to prove that they indeed do “own” the debt, as well as “own” the right to collect the debt. They also must verify the accuracy of the amount of claimed debt. And as the party bringing suit in an assignment case is not the original creditor, they often lack vital paperwork which is needed to prove or testify to the validity of the debt (i.e, an original credit card agreement, payment statement, ledgers, etc).

Also understand that debt collections is a “high volume” business model. The big collections firms prefer to go after the “easy” dollar, which are the folks who simply default and fail to answer the complaint, allowing the collection firm to get a default judgment on which they can then levy bank accounts or garnish wages. By the time it gets to that stage, fighting them off is much harder. Don’t make things easier for them!

My office has successfully defended collections actions in many Special Civil part cases, and have won cases where the debtor did not end up paying a cent to the collectors, or settled with the collectors for as little as 20 cents on the dollar.

Call us today at 908-782-5313  for a free consultation about your debt collection lawsuit. Don’t delay- these cases will not just “go away” – you need to bring the fight to them!

* UPDATE: There is a lot of VERY BAD advice/information available online when one enters the term “pressler and pressler” or “credit card debt” into internet search engines. Believe me, I understand the anger, frustration, and powerlessness one feels when sued by these collectors.

However, bizarre “defense strategies” such as contacting the FBI, petitioning your Congressmen, quoting large passages of the Constitution, throwing rotten eggs at their office building, etc. are not going to work. 

There are also forms and defense pleadings posted online by non-lawyers, some of whom actually charge money to access their “document kits.” I have actually reviewed many of these (some of which my clients have attempted to use before contacting me to represent them). The quality of these pleadings ranges from “mediocre” to “downright abysmal” to, often times, bizarre and totally illogical.

Remember, a layperson is held to the same Court rules and standards as a licensed NJ attorney when filing paperwork with the Court and asserting defenses to a lawsuit. The Court’s employees/clerks cannot give you legal advice, evaluate the merits of your case, or prepare documents or pleadings on your behalf. 

The single best defense to a collections lawsuit is to contact an attorney with experience in NJ Special Civil Part collections defense cases. We’re here to help.

Call 908-782-5313 today for a FREE consultation about your case, or email us using the “contact us” form on this website.