With New Jersey corruption back in the news, I posted a bit about the sweet little set-up certain debt collection law firms have in the Garden State.
Although New York is cracking down on the mega-collectors like Goldman & Warshaw (“GW”), New Jersey has left these fellas virtually untouched.
As I said yesterday, the modus operandi for a GW firm is in the mass litigation that they serve up to the county court system, especially something called Special Civil Part.
When a judge is faced with 2,000 or 3,000 complaints for a judgment, he or she isn’t going to spend a lot of time on the particulars of each case. It’s not that they’re necessarily lazy–although some are intellectually lazy. It’s simply that if you have to process 2,000 small claims cases, there is only so much time.
Unlike Pennsylvania, which does not have wage garnishment, New Jersey does, and has for about 100 years or so.
The law is a statute, N.J.S.A. 2A:17-50, and as of the latest I have (2005), it says:
a. When a judgment has been recovered in the Superior Court, and where any wages, debts, earnings, salary, income from trust funds, or profits are due and owing to the judgment debtor, or thereafter become due and owing to him, to the amount of $48.00 or more a week, the judgment creditor may, on notice to the judgment debtor unless the court otherwise orders, apply to the court in which the judgment was recovered, or to the court having jurisdiction of the same, and upon satisfactory proofs, by affidavit or otherwise, of such facts, the court shall grant an order directing that an execution issue against the wages, debts, earnings, salary, income from trust funds, or profits of the judgment debtor.
My Google Rule source for this is the following website: OneCLE.com New Jersey Statutes Annotated, Title 2A, 17:50(a)
So it is pretty clear that if you get a judgment against you in New Jersey, and you have some wages, potentially the judgment creditor gets to send Goldman & Warshaw after you for something out of those wages. The law says, the court “shall grant an order” for a garnishment.
BUT . . .
where this is twisted against the public is that there is a limiting statute, one that caps the amount of the garnishment. It’s NJSA 2A:17-56:
2A:17-56. Limitation on amount specified in execution.
2A:17-56. a. In no case shall the amount specified in an execution issued out of any court against the wages, debts, earnings, salary, income from trust funds or profits due and owing, or which may thereafter become due and owing to a judgment debtor, exceed 10%, unless the income of such debtor shall exceed 250 % of the poverty level for an individual taking into account the size of the individual’s family, in which case the court out of which the execution shall issue may order a larger percentage.
This is the statute where Goldman & Warshaw make all their money. As it’s clear, it says that the amount of a garnishment is capped at 10%. Capped–no more than 10%. It doesn’t say it “must be 10%”. It could be three percent, or two percent. Or a fixed amount like $20 (provided that the person earned $200 that week!)
But the law clearly does not say the judge must impose a 10% wage garnishment on a judgment debtor.
The little part about “250% of the poverty level” (about $27,000 a year for a single guy) was added by former Senator Bryant in 2005. It used to say $7,500. That part addressed circumstances where someone was making over a set limit. Then, the judge was enabled to go above 10%. Not required, enabled. So if a judgment debtor had, say, some crazy number like $40,000 a week wages (hey, some do!), then the creditor could get a bigger piece than 10%. Probably fair, right?
Every judgment debtor in New Jersey faced with wage garnishment should be pointing 2A:17-56 out to the judge, the part about the cap. But most get steamrolled. Jon Corzine has looked the other way, it appears.
Once Goldman & Warshaw obtain the 10% (or more) garnishment against the debtor, the debtor is screwed. GW sends the garnishment order down to the local Sheriff, and a person connected to that office gets to levy. This person will also be paid to levy and so has an interest in making sure the court system has that garnishment at 10%, because they get a bigger cut that way. (New Jersey sleaze at its finest.) So you’re never going to be told about 2A:17-55, a statute allowing modification of garnishment order, even.
For a law firm to do the legwork for you on all of this, well, frankly, it wouldn’t pay them (if you don’t have the money for the judgment you probably don’t have it for a law firm). But I am surprised that the pro bono public aid law groups haven’t jumped all over this, years ago.
Every debtor in New Jersey facing a wage garnishment should state to the judge that the law does not require 10%. It simply says “not exceed 10%”. This means UP TO 10%. And explain why you can’t afford it: the fact-finding part that is supposed to go with granting a wage garnishment(!) that most New Jersey judges leave out.
Again, I don’t know why Governor Corzine wasn’t on this. Probably because the state is falling apart in countless other ways, and he has been spending the time just keeping the roof over people’s heads (foreclosure crisis). The fact that he put Goldman & Warshaw on the state payroll has me a bit concerned, but I am sure in the end it’s the fact that no one has pointed the excessive wage garnishment game out to him.