Someone came and left my nanny some paperwork when I came home today.
It was a civil summons filed with the Superior Court of NJ for my second mortgage, which I haven't paid in quite a long time. Balance is 100K.
They cannot foreclose, as even the first mortgage is under water, and the home has negative equity.
What's the strategy to handle this civil summons then?
Hi All
Hi Airahcaz- If you don't respond to the complaint in the time frame allow by NJ court (35Days) then the plaintiff will be awarded a (default or summary judgment.) If they are awarded the judgment they could attempt to garnish your wages or seize funds from your bank accounts or come after any assets (car, boat, antiques etc)
If you have documented income or assets then I would suggest you challenge the complaint, answer the complaint.
Contact the court where the complaint was filed. Tell the clerk you need a packet for answering a lawsuit. The clerk will send the correct forms and instructions. The clerk will not give any legal advice.
If you have no assets or documented wages then you could roll the dice however the judgment will follow you around for a long time.
You really need to answer the complaint with defenses and affirmative defenses and ask the court to dismiss the complaint.
You could file your motion to dismiss with your answer.
Was your second mortgage sold to a collection agency? If in the affirmative, you may challenge there standing to collect the debt, chances are they do not have the original contract and will go away when you file your answer to the complaint, they don't want to spend time and money in litigation if they know they can't collect anything. They are looking for a quick non challenged judgment.
I have not heard about banks trying to collect on second's in NJ due to first lien holder rights however junk debt buyers and collection attorney's attempt such collection action in hope of acquiring a judgment or collecting some type of settlement, again they are looking for a quick unchallenged judgment.
Best regards
Nj-13 months
Acedsfull/HWP
Will an answer potentially scare them away or just delay matters?
For a settlement offer, they want my income, tax returns, pays tubs , etc
Hi Airahcaz,
It will depend on how far they want to take the case. They may try to contact you and come to some arraigments.
One word of causion. Do not give them any financial information. You are not obligated to give them anything unless instructed by the court thru interrogatories. Do not volunteer any information.
Since I do not know your overall plan in regard to the property and your financial plan in general it is difficult to formulate a proper strategy. Best strategy for now is answer the complaint.
Best regards
Nj-13 months
Acesfull/HWP
Well my lawyer will file an answer but when she approached them to settle, they requested financials first. Her fear if we don't provide is that they pursue a judgement for the full 100k.Originally Posted by acesfull
What do you make of that?
Hi
If you expose your cards(Financials) to early in the game then your opponent will have extra information to use against you in the negociations. I am confused why your attorney offered any settlement without first asking to see a copy of the legal contract between you and the collection agency. Yes, they can try to sue you for the full 100k plus reasonable attorney fees however if you go to court they will need to prove they own the debt and also need to prove standing to collect on the debt. There is also no guarantee they will win the case. Should you get to the discovery phase of the case, they would have to present to the court the exact amount they paid to purchase your account, believe me collection agency's do not want to disclose how much they paid for your account.
If your attorney is reasonable in regard to his/her fees then I would challenge the complaint. Remember when its all over should you lose the case there is always a BK up your sleeve especially if your deliquent on the first and upside down. BK is the escape outlet when you have no other options.
Another thing to consider in regard to showing them your financials, if you have assets and a steady income with bank accounts etc they will try harder to get to those assets. Don't show them anything. Make them prove there case. Play hardball.
THIS IS NOT LEGAL ADVICE AND SHOULD NOT BE ACCEPTED AS LEGAL ADVICE.
The information above is based on personal experience and your situation may be different.
Best regards
Nj-13 months
Acesfull/HWP
Well now they're going to amend the complaint and add the 188K second mortgage that is in default on the other house, totaling 288K - any other suggestions, seems like BK is the only route...
I don't have any advice per se, however I have been giving Green Tree the big middle finger on my second mortgage. Thankfully in Cali, there is a "security first" rule that keeps them from suing without foreclosing first. I'm interested to see how your case turns out.
I would do as ace suggested and get them to prove they own the debt. It wouldn't surprise me to see them trying to sue on something they don't even own.
It woud seem to me that bankruptcy would be the route to take here. Not legal advice. However use the bankruptcy card wisely and at the right time. If you do not want to file bankruptcty and want to settle then contact the company and tell them if they don't want to settle then you will file bankruptcy. Some of these I have heard settle for 10 to 20%. So contact them and make them an offer.
My attorney is threatening BK, however she brought up an interesting point. Should they get a judgment for the 288, they would attempt wage execution and it would take many years for this to be paid down.
Settlement tactic is to get them to agree to a significantly less amount, from a tenth to a third, and agree to pay them over time but in a shorter time period than the time it would take should they garnish wages.
The absolute worst case is the wage execution, which would actually be better than bk, and even after wage execution hits, we can still go back with settlement offers.
I should also mention that they want me to take a 401k loan. My plan only allows for one loan outstanding, and so we'll state that there is one outstanding and being used for other credit card debt that is being settled already. If they force the issue and want proof, I'll have to initiate the loan soon and separately show the debts that are in settlement. Then use the loan proceeds elsewhere to my benefit and not theirs.
MWM has advised that their client, GreenTree, has rejected our offer to settle for $50K over time, and will not entertain anything less than 50% of the combined loan balance of $288K.
Filing of the Answer is already underway, but this is getting pretty tough.
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