As a creditor there is a risk that the money a debtor owes you will go unpaid. This is especially true if the debtor files for bankruptcy. Civil court systems provide a number of tools permitting you to collect debt outside of a bankruptcy action. An experienced collection lawyer utilizes one such effective tool, called a writ of attachment.
Writ of Attachment Defined
A writ of attachment, a form of a judicial lien, permits creditors to place a legal claim on the debtor’s assets early in the judicial process, even before a judgment is entered. New Jersey permits a writ of attachment on real or personal property at the beginning of the case.
The writ of attachment provides a two-fold benefit:
- Protects the creditor’s rights and ability to collect on any future judgment; and,
- Provides leverage to negotiate a settlement with the debtor early in the process.
However, a skilled collection lawyer understands that there are limits to how and when a writ of attachment may be used.
Federal and State Requirements
Most state and federal jurisdictions permit creditors to obtain writs of attachment, although there are some differences between the two.
Typically, the U.S. Marshals Services is the agency used to seize and hold any property subject to the writ of attachment. In successfully obtaining a writ of attachment, courts generally require the claim to be:
- Based on a contract and for money;
- Of a fixed or readily ascertainable amount;
- Not fully secured or unsecured; and
- Of a commercial nature.
A court will require you to show:
- Without the relief sought, you will likely suffer irreparable or great harm; and,
- More likely than not you will be successful in obtaining a judgment.
New Jersey Requirements
Pursuant to the New Jersey Court Rules 4:60, et. seq., to successfully obtain a writ of attachment, you must show:
- There is a probability that final judgment will be in your favor;
- There are statutory grounds for issuance of the writ; and,
- The debtor has real or personal property at a specific location within the State subject to attachment.
If successful, the court will issue an order directing the issuance of the writ, which shall contain the following:
- Fixing the amount or value of the property to be attached;
- Providing the manner to which notice of attachment shall be given to the debtor;
- Such other terms and conditions the court deems appropriate.
Generally, the writ will be issued to the sheriff where the property to be attached is located. The sheriff will then impose a levy within thirty days of the date of the writ.
Items That Can Be Attached
If the creditor meets all of the requirements, the court may issue a writ of attachment for any non-exempt property.
For business debtors, non-exempt property that could be attached includes any property the business holds that is within jurisdiction.
For individual debtors, there are greater restrictions of what non-exempt property could be attached. For example, earnings are most commonly held as an exempt property. However, federal courts permit creditors to attach any property that the debtor has “possession, custody, and control” of.
Obtaining a Writ of Attachment
For a court to have authority to take action on your behalf, a civil lawsuit must first be initiated which files and serves a complaint for recovery of the debt owed to you or your business. Either simultaneously or after service of the complaint, you may initiate a proceeding to obtain a writ of attachment.
There are two ways you may request an order for an issuance of a writ of attachment:
- Motion – Requires notice to the debtor, giving the debtor an opportunity to file and serve opposing affidavits and cross-motions. Within a short time period — in New Jersey, at least three days after the notice — there would be a hearing to determine whether the writ of attachment would be issued.
- Ex parte – In extreme cases, the debtor is not notified of the request for the writ of attachment. In New Jersey, this may occur if the debtor is likely to flee, or if giving the debtor notice will defeat the execution of the writ.
Generally, you will be required to file and serve several documents such as:
- Application form;
- Notice that contains the hearing date, time and location;
- Supporting affidavits (statements) and other evidence; and
- Drafts of court orders and writs.
Once the order of issuance of writ of attachment is granted, you usually can obtain several writs to place liens in the different counties where the debtor may own property.
Courts may also require you to obtain a bond (or undertaking) as an extra insurance in case the attachment is later shown to be wrongful. The court determines the amount of the bond, which may be based on the probable damages due to a wrongful attachment.
Seek a Knowledgeable Debt Collection Lawyer in New Jersey
Obtaining payments for the debt owed to you can be demanding. At Snellings Law LLC, a tenacious collection lawyer will review your facts and craft your best strategies to maximize the repayment of the amount owed. Call us at (973) 265-6100 today.