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September 30, 2020 Collections

Loan Collection Enforcement Options

One of the basic tenets of most businesses is providing loans to debtors for goods and services. Companies of all sizes will issue loans with the expectation that payments will be made until the debt is settled. Unfortunately, that is not always the case, and if you need assistance with a commercial or consumer collection action, the knowledgeable collections attorneys at Snellings Law in Parsippany are here to help. To learn more about your options for loan collection enforcement, call or contact our office today to schedule a consultation. 

Common Types of Loan Collection Matters

There are many different types of consumer and commercial loans that a business may offer to debtors, which may ultimately result in a collection lawsuit. A consumer loan is one that is made to an individual and is typically used for personal reasons. A commercial loan is one that is made for goods or services used in the course of business. Some of the most common types of loan collection matters that Snellings Law assists in include the following:

  • Credit card debt
  • Student loans
  • Mortgage loans
  • Lines of credit
  • Vehicle or boat loans
  • Credit agreements
  • Personal loans
  • Medical debt, and more.

It is important to distinguish between consumer and commercial loan collection, as it may impact the legal options available to you as a creditor for collection. An experienced collections attorney like those at Snellings Law have an in-depth understanding of collections law and will be able to quickly begin the collections process to collect the money you are owed on a debt.

Wage Garnishment

For consumer loans to individuals, one of the most common options for collection is wage garnishment. A collections attorney receives a wage garnishment order from the court and contacts the debtor’s employer. The order requires the employer to withhold a certain portion of their employee’s paycheck each pay period and send it to the collections attorney for the purposes of loan repayment.

In order to qualify for wage garnishment in New Jersey, a debtor must make more than $217.50 per week and net pay after taxes and deductions of more than $154.50 per week. If a consumer debtor qualifies, wage garnishment is limited to 10% of gross pay before taxes and deductions. Consumer debtors are also limited to one wage garnishment order at a time, but a collections attorney can assist in getting priority on your loan collection.

Levies on Financial Accounts

Another option for loan collection on both consumer and commercial debts is the use of a levy on financial accounts. This is also known as an attachment or an account garnishment. A levy allows a creditor to take whatever money is in a financial account and apply it toward the payment on a loan. Similar to a wage garnishment, a collections attorney must first get an order from the court that allows a levy on a financial account. Levies can be put on checking accounts, savings accounts, credit union accounts, and more.

However, under New Jersey law, the debtor must be given prior notice of the intent to use a levy for loan collection, and certain assets are excluded from a levy order. When you hire a collections attorney to collect on a loan, they can identify all possible accounts to attach a levy in order to secure as much payment as possible through this method. 

Liens on Property

Both consumer and commercial loans can also be subject to liens for the purposes of collection. A lien can attach to both personal property and real estate of a debtor and can make the property extremely difficult to sell. If the personal property or real estate is sold with the lien, any proceeds must first be used to pay the lien before the debtor can collect any remaining value. In New Jersey, a lien can remain attached to both personal property and real estate for 20 years.

Writs of Execution

One final option is a writ of execution on consumer and commercial loan debt. A writ can be used to levy financial accounts as well as other types of assets. A writ of execution grants possession of assets to a creditor to collect on a loan. New Jersey law allows for a writ of execution on personal property worth over $1,000 as well as on motor vehicles that are registered to the debtor in New Jersey.

Talk to Our Office Today

If you have loan collection needs and would like to speak with an experienced New Jersey collections attorney about your case, call or contact Snellings Law today to schedule a consultation.