I’ve written previously about “debt & credit card consolidation” companies that advertise heavily on the radio (although lately, if you listen to AM radio, you’ve likely noticed that the “my pillow” guy hardly lets any other advertisers get a word in edgewise- I wonder if it might be more economical for him to simply purchase his own radio station and thus assure himself 24/7/365 ad coverage).

At any rate, I settled a client’s case this week against a credit card company for a savings of $5500 off the amount sued for in the Complaint, which was nearly a 50% “discount.” Sadly, she had failed to answer the Complaint on time, and when I was retained I faced a default judgment which needed to be vacated.

I immediately drafted and filed a Motion to Vacate Default Judgment under NJ Rule 4:50-1, and filed it in the Special Civil Part of Middlesex County, NJ. The debt collector’s lawyers filed papers objecting to same, and an oral argument was scheduled on the Motion.

As oral argument began, the Judge initially refused to vacate the default. As I’ve discussed, there are two factors which are required to vacate a default judgment in NJ Special Civil Part. The first is an excusable neglect as to why you failed to answer the complaint on time. The second is that you need a meritorious defense to the suit.

My client established an “excusable neglect” due to health issues (which we proved via a letter from her doctor and hospital).  The judge noted that he had sympathy for her situation, but did not see a defense since she admitted to having had the credit card account and using the card, etc. The judge stated “this is a book account case, how can you defend this unless there is fraud or identity theft?”

I informed the judge that I did not have a copy of the Cardholder Agreement, but that there may be a Statute of Limitations defense. The judge somewhat angrily responded that:

“Counsellor, per the complaint, your client made the last payment in 2012, and NJ has a six-year statute of limitations, so how is that a defense?”

I told the judge that many cardholder agreements contain a “choice of law” clause that provides for another state’s law to govern the contract. I informed him that I have won motions based on the Delaware 3-year Statute of Limitations being applied by New Jersey courts to these types of cases.

The judge then asked the debt collector’s lawyer if he had a copy of the cardholder agreement. He did not, and was caught off guard and totally unprepared for my argument.

The judge sat back a moment, and then said “I’ve never heard of that before, but I agree that if true it is a meritorious defense. Your motion to vacate is granted.”

The above goes to show how important a skilled and experienced NJ Debt Defense attorney can be in your case. Many issues in debt defense are somewhat obscure, and since it’s so rare that debtors are represented by counsel, many judges never come across these types of legal arguments in Court. (In fact, while in court that day I observed 3 different pro se (unrepresented) litigants try to vacate default judgments. The judge denied all of them).

Once the default was vacated, I filed an Answer & Affirmative Defenses, served interrogatories, and upon receiving the cardholder agreement in discovery, determined that the Delaware statute did not apply to this case. However, through pre-trial negotiation, I was able to settle the case for nearly a 50% discount.

I’m quite certain that had we gone to trial, the plaintiff’s attorney would not have had a witness available, and thus the case would have been dismissed without prejudice by the Judge.

But my client is in the process of buying a house, and preferred to just settle rather than roll the dice at a trial or even have the case re-filed at a later date against her.  My knowledge of the law and tough-as-nails negotiation saved her a substantial amount of money.  Absent my help, her default was almost certain not to have been vacated, and she would have faced bank levy, wage garnishment, and all the other unpleasant tactics used by NJ debt collection attorneys.

Call me today at 908-782-5313 to discuss your NJ Special Civil Part case. I may be able to vacate your NJ Special Civil Part judgment and save you money!