If you have exhausted all other options attempting to collect a debt from a specific debtor, you may begin to consider taking that debtor to court to obtain a legal judgment. Holding a legal judgment can allow you to use more serious debt collection methods like garnishing a debtor’s wages. However, before you begin the legal process, there are a number of things you should consider to determine if this process will be worth the effort required.
Here are some of the things you will want to consider before attempting to sue a debtor:
Is the Debt Large Enough to Matter?
The first thing you have to evaluate when considering going to court with a debtor is whether the debt is significant enough to make the process worth while. Going to court will require a good portion of your time.
Therefore, if the debt is smaller than the value you place on the amount of time that you will personally have to spend in a courtroom, obtaining a judgment could be a losing situation regardless of the legal outcome. For example, it wouldn’t be worth filing an international debt collection suit to collect $125.
The legal process may also require the added expense of hiring a lawyer to represent you and present your case. Everyone knows that good quality lawyers do not come cheap, so you must evaluate the costs that may be associated with the amount of the debt that is outstanding. Depending on the size of the debt, this could be a no-brainer or a very tough decision.
Is the Outcome You Seek Even Possible?
This question forces you to consider the possibility of your desired end result. Even if you are able to obtain a judgment against your debtor, will you ever receive payment? Will you even be able to recoup your debt collection attorney expenses?
Holding a legal judgment against a debtor doesn’t mean a whole lot if that debtor is a company that has gone out of business. Likewise, it won’t be very helpful to be able to garnish a debtor’s wages if that debtor is unemployed. Before wasting your time pursuing a legal judgment, take the time to assess how the situation might play out after the judgment is handed down.
Will You Be Able To Prove Your Case?
The third important thing to consider before going to court is how likely you are to win. In order to obtain a judgment over a debtor, you have to be able to prove that the debt exists. You will need to prove that there was a purchase made and that after multiple attempts to demand payment, none was ever received.
If you are considering going to the lengths of legal action, obviously you have already exhausted simpler methods like writing letters and making phone calls. However, you have to be able to prove that in a court of law. You will want to have documented the dates and times of any contact that you have had or attempted to make with the debtor. When sending letters, you will want to have retained copies for your records.
While taking a debtor to court might feel like a good idea, it is often a waste of time and resources. Because the debtor has already caused you so much aggravation, forcing them to appear in court might make you feel better about the situation. It is usually a good idea to calmly work through these three questions before you decide to pursue legal action to make sure that it is actually worth the effort.
It is also worth noting that many debt collection companies, like Direct Recovery, work on a contingency basis. Therefore, it might be in your best interest to simply let them handle the legal aspects of collections for you. This could save you both time and money in the long run.