By: Robert J. Nahoum
THE PROBLEM
You were sued by a debt collector on an old credit card debt and the debt collector has been awarded a default judgment by the court. You just heard from your landlord and he tells you that he received instructions from the debt collector to freeze your security deposit.
Can the debt collector do this?
THE RULES
A “restraining notice†is a judgment enforcement device that a judgment creditor can serve on any person (or entity) that is holding property of the debtor, who may come into possession of property belonging to the debtor or who owes a debt to the debtor. The restraining notice essentially freezes the status quo and prevents the recipient of the restraining notice from giving the debtor back his property. The judgment creditor can then make a motion to the court to have that restrained property turned over or he can engage the Sheriff or Marshall to seize and levy on the property.
The most common example of the use of a restraining notice is where the judgment creditor serves a bank, instructing that any money in the debtor’s account be frozen. However, serving a bank does not always turn out to be effective for the debt collector because of certain exemptions that apply to frozen banks account.
No such exemptions exist for security deposits held by landlords. Let’s say for example that your rent is $1,500 per month and you have two months’ rent being held by your landlord as a security deposit ($3,000.00 total). Let’s also say there is a $2,000.00 judgment against you. If the debt collector can successfully freeze the security deposit, they are guaranteed to satisfy the judgment when your lease ends or when you move out. For many people this can be devastating because they rely on rolling over their security deposit as security for their next home rental.
WHAT TO DO
If you learn that a debt collector has frozen your security deposit, consider hiring a lawyer to see if the judgment can be vacated or settled.
If you need help settling or defending a debt collection law suit, filing for bankruptcy, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you. With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
info@nahoumlaw.com