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What Happens if You Avoid Getting Served for a Debt Collection Lawsuit?

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Can You Avoid the Server in a Debt Collections Lawsuit Forever?

If you have mounting debts behind you, you may end up facing a debt collection lawsuit at some point. This problem is not uncommon; there are roughly 30 million Americans who have at least one debt in collections. While avoiding the process server does delay you in getting bad news, it can cause some problems for you later on.

The Lawsuit Still Happens Even if You Aren’t Served

There are some important things to know if you are considering trying to hide from a process server for a debt collections lawsuit. For starters, you should understand that avoiding the process server will not actually keep you from having to go to court. Technically speaking, the court date could proceed without you knowing about it. However, the server is expected to put forth a good faith effort to find you. 

When the server cannot get in touch with you right away, they could attempt a variety of other contact methods. They might try to visit your workplace or last known address. If this does not work, the state of New Jersey lets the server leave a copy of the summons at your address or give it to anyone else in your household who is over the age of 14. For people without a known address, the plaintiff can put a notice in a local newspaper informing you of the upcoming lawsuit.

There May Be Legal Consequences to Avoiding the Server

Avoiding a process server means you might end up being the subject of a lawsuit that you are not aware of. If a roommate throws away the papers or the notice is published in a newspaper you never see, you have no way of knowing the time and date of the lawsuit. This is a big problem because the judge usually rules in favor of the plaintiff if the other party does not show up.

Another problem with avoiding a process server in New Jersey is that you end up not having the time to prepare your defense. The legal process of being served with a lawsuit is meant to give you time to find a New Jersey lawyer and get ready for your case. If you are dragging out the process of being served, you end up without enough time to defend yourself or work with the people suing you to find a reasonable settlement.

Being Served Doesn’t Mean You Can’t File for Bankruptcy

A major reason people want to avoid a process server in a debt collection lawsuit is because they plan on addressing the lawsuit by filing for bankruptcy. Depending on your situation, it is true that bankruptcy can help manage the consequences of a debt collections lawsuit. However, this does not mean you have to resort to elaborate methods of hiding from process servers. As a bankruptcy lawyer can help you understand, you still have the opportunity to restructure your debts regardless of whether any lawsuits have been filed or judgments have been entered. However, it is still usually best to file for bankruptcy between the time of being served and going to trial because it lets you get started on the process as soon as possible. 

It is tempting to avoid bad news and hope that it goes away, but trying to hide from a debt collections lawsuit never ends well. To get a good outcome from your case, you need to let yourself be served so you can meet with a bankruptcy lawyer and get started on your defense. Neuner & Ventura LLP has spent over 30 years helping the residents of New Jersey deal with debt and bankruptcy issues. Our bankruptcy law firm has the experience needed to help with these sensitive issues. Contact our practice in Marlton, NJ, today at (856) 596-2828 or email us to set up your free initial consultation.

Challenges to the Discharge of Luxury Purchases and Cash Advances

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One of the advantages of a Chapter 7 bankruptcy is that it allows you to permanently discharge certain debts, meaning that you will no longer have personal liability for them. As a general rule, credit card debt can be discharged, but there are limits.

Under the bankruptcy laws, any debts arising from the purchase of luxury goods  within 90 days of your petition for bankruptcy  made from a single creditor will be presumed to be fraudulent and non-dischargeable, if the purchases total more than  $650. This result is not automatic. The creditor has to file a Complaint in the bankruptcy seeking non-dischargeability. If it does so, the burden is on the debtor to prove that the purchases or resulting debt were not made with intent to defraud the creditor. Stated another way, a creditor will not be required to prove that you did not intend to pay or that you intended to discharge the debt in bankruptcy. Instead, you will have to  introduce evidence to demonstrate that the purchase was not a luxury, but necessary for the support or maintenance of the debtor or a dependent or spouse, or that the purchase was not made for a fraudulent or improper purpose.

For purposes of the bankruptcy law, a luxury item is considered to be any goods or services not reasonably required by the debtor for his or her own support or for the support of any legal dependent. While the determination of whether an item is a luxury item depends on circumstances, items like food, gas, clothing and furniture are more likely to be considered non-luxury than jewelry, home appliances, books, or a computer.

The same presumption applicable to luxury purchases also applies to cash advances on a credit card or other open end credit plan made within 70 days of filing, to the extent that these total more than $925. This does not apply where the cash advance is for a business purpose.

We generally recommend that our clients stay away from these kinds of purchases or use of credit. Like any unusual or suspect financial dealings, these will commonly result in suspicion and greater scrutiny across the board. When anticipating a bankruptcy, it is generally best to play it straight and stay within the bounds applicable to the “honest but unfortunate debtor”.

That said, a certain amount of legitimate planning going into a bankruptcy is permitted. The wisest course of action is to consult with and follow the advice of an experienced and ethical bankruptcy lawyer.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, our bankruptcy lawyers provide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another bankruptcy attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

New Jersey Bankruptcy Attorneys

We have over 30 years of experience providing sound bankruptcy counsel to businesses and individuals in southern New Jersey. Steven R. Neuner has been certified as a business bankruptcy lawyer by the American Board of Certification and has served as a bankruptcy trustee since 1993. He is a New Jersey Super Lawyer and carries a 10.0 rating with Avvo. We know from experience that every legal situation is unique.

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Copyright 2020 Neuner & Ventura LLP. All Rights Reserved. *Free consultation limited to initial interview re new debtor bankruptcy or debt relief. We reserve the right to charge a consultation fee for any other matters, including review of existing cases, work by other attorneys, creditor representation, defending motions or adversary proceedings, or strategy advice where a bankruptcy is not requested or advisable.