In the United States, each state is obligated to honor judgments entered by courts in other states. This obligation arises from Article IV, Section 1 of the United States Constitution, which is commonly known as the “Full Faith and Credit Clause.” For creditors, this means that judgments obtain in one state can be transferred to another state for enforcement or collection. The procedure of transferring a judgment into a new state is usually referred to as “domesticating” or “docketing” a foreign judgment. This post will discuss the docketing of foreign judgments in New Jersey.
Going through the process of docketing a foreign judgment in New Jersey becomes attractive to a creditor with a judgment obtained in a court outside of New Jersey when the creditor learns or believes that the person who owes them money, the judgment debtor, has assets in New Jersey.
By way of example, if a creditor obtains a money judgment in Pennsylvania or New York, then learns that the debtor owns real estate or has bank accounts or a income in New Jersey, the creditor may be unable to access these assets to collect on the judgment unless the creditor domesticates the judgment in New Jersey. Conversely, if a creditor obtains a judgment in a New Jersey court, but wants to access a debtor’s assets in another state to enforce the judgment, the New Jersey judgment may need to be domesticated in another state.
In New Jersey, the Uniform Enforcement of Foreign Judgments Act, N.J.S.A. 2A:49A-25 et seq., dictates the procedure for docketing an out of state judgment, referred to as a “foreign” judgment, in New Jersey. The Uniform Enforcement of Foreign Judgments Act permits a judgment, decree, or order of the United States or of any other court which is entitled to full faith and credit in New Jersey to be filed with the Clerk of the Superior Court of New Jersey.
Pursuant to Enron (Thrace) Exploration & Production v. Clapp, 378 N.J.Super. 8 (App. Div. 2005), money judgments entered in foreign countries are enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit, provided that the provisions of the Uniform Foreign Country Money Judgments Recognition Act, N.J.S.A. 2A:49A-16 to 24, are met.
Provided the relevant procedural requirements are satisfied, the Clerk of the Superior Court of New Jersey is obliged to treat a foreign judgment as a judgment entered in a New Jersey court.
Once the foreign judgment is recorded, the Clerk will issue a notice to the defendant/judgment debtor giving them 14 days to file an objection to the judgment. No execution of process can occur during that 14-day period, meaning that collection efforts must wait until 14 days have passed. A judgment debtor may request a stay of execution, for example, if there is a pending appeal of the judgment in the state where the judgment was originally entered. Assuming the time period for objection passes without incident, the creditor may begin efforts to access the debtor's New Jersey assets in order to collect on the creditor's judgment.
The New Jersey litigation lawyers at the Law Office of Bart J. Klein advise clients on issues relating to a broad range of civil disputes, including collection of commercial judgments. We welcome you to call us at (973) 763-6060, email email@example.com, or complete our online contact form for more information.
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