Take steps to collect debt via the courts
If someone owes you money and you want the legal system to help you collect the debt, you need to file a lawsuit.
If the amount of the debt is $7,500 or less, you can file your lawsuit in small claims court and, with a little study and effort, be your own lawyer. If the debt exceeds $7,500 but is not greater than $15,000, you can file your lawsuit in county court. Here, the rules and procedures become somewhat more complex, and you are best advised to hire a lawyer. And if the debt exceeds $15,000, you’ll need to file your lawsuit in district court — the big league court. — where the rules and procedures are sufficiently complex that even experienced lawyers are sometimes baffled, so you will definitely want to use a lawyer to bring your case.
As you might expect, filing fees increase as you move up the jurisdictional ladder. It costs from $31 to $51 (depending on the amount of the claim) to file a lawsuit in small claims court, $87 in county court and $224 in district court.
If you’ve decided to sue, the document that starts your lawsuit and describes your claim is called a “complaint.” The complaint is submitted to the court and a copy must be delivered to the person you’re suing — the defendant. You can’t just use the mail for this. You need to hire a process server or the county sheriff to personally deliver the complaint, along with another document called a summons, to the defendant. (There’s something in the U.S. Constitution that requires this.)
The prize you’re looking for when you sue someone who owes you money is called a judgment. A judgment is an order of the court confirming that the person you are suing in fact owes you the money. If the defendant doesn’t respond to the complaint in the time allowed, you can ask the court to enter a judgment in your favor by default.
If the defendant does respond — by filing an answer — you’ll likely have to have a trial before you can get your judgment. (People who owe money and are being sued quickly learn it’s easy to buy time in the legal system by filing an answer, thereby extending the opportunity for a winning lottery ticket or the timely death of a relative.)
In district court, it’s sometimes possible to obtain a judgment by filing a motion for summary judgment. Here, you need to convince the judge that there are no material facts in dispute requiring a trial to resolve and that you are entitled to your judgment without having to endure the costs and delays inherent in a trial. Summary judgments are hard to come by because defendants — and their lawyers — are good at coming up with issues of fact they want to dispute. (“Judge, I just don’t think that’s my signature on this promissory note and, if it is, well, I don’t remember getting the money.”) Plus, trial court judges never get reversed by a higher court for not granting a summary judgment motion, but they regularly get reversed for granting such a motion, so they tend to be a little gun-shy.
Now, as any lawyer who’s been around awhile will tell you, it’s often easier to obtain a judgment than to collect it. That’s why the defense a lawyer hates most is the “Sue me, I don’t care” defense (also known as the “bloodless turnip” defense). Here, the person who owes the money claims to be insolvent and expresses a sincere intent to march off to bankruptcy court if a judgment is obtained. This is often a bluff, but not always.
If your lawsuit does in fact chase your debtor into bankruptcy, you will come to fully understand the concept of throwing good money after bad.
But, if your debtor is not insolvent, the law provides tools by which you can try to collect your judgment. I’ll tell you about a few of them next week.
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Jim Flynn is a private attorney at Flynn Wright
& Fredman LLC in Colorado Springs. The firm primarily represents clients in the real estate, financial services and small-business sectors. Reach him
at jtflynn@fwflegal.com.
