Receiving a lawsuit over credit card debt can stop you in your tracks. Maybe you knew the balance was out there, or maybe this caught you completely off guard. Either way, ignoring a summons typically leads to an automatic loss. Here is what actually happens and what you can do about it.
You have 35 days to respond
Once you receive a lawsuit, New Jersey gives you 35 days to file a written response with the court. If you do not respond, the credit card company wins automatically, with no hearing, no argument, and no chance to tell your side. This is called a default judgment, and it gives the creditor serious legal power over your finances.
A judgment puts your paycheck and bank account at risk
Once a creditor has a judgment against you, they can go after your wages and your bank account. New Jersey generally caps consumer wage garnishment at the lesser of 10% of your gross pay or 25% of your disposable income if your earnings are 250% or less of the federal poverty level.
If your income exceeds that threshold, the court can authorize a higher percentage up to the federal 25% limit. They can also freeze your bank account and take what is in it. What makes this especially serious is that a judgment in New Jersey is valid for 20 years and can be renewed for another 20.
Bankruptcy can put an immediate stop to collection activity
Whether a creditor has already taken you to court or obtained a judgment against you, filing for Chapter 7 or Chapter 13 bankruptcy triggers an automatic stay. This immediately stops all collection activity, including the lawsuit, the garnishment and the bank levies.
Chapter 7 can wipe out credit card debt entirely, while Chapter 13 lets you reorganize what you owe and catch up over time. Either way, filing gives you breathing room to work through your situation without creditors closing in.
You do not have to figure this out alone
A credit card lawsuit moves fast, and the clock starts ticking the moment the complaint reaches you. Speaking with a bankruptcy attorney sooner rather than later gives you a clearer picture of where you stand and what options are still available before a judgment limit what you can do.
