Steve Harms

Friday, January 4, 2013

A detailed discussion of the collection law suit is found here.

Collecting your money through suit: Filing the collection law suit

In December, I posted a blog discussing the considerations used for filing a collection suit.  Now, I'm continuing that discussion with an outline of the progress of a collection law suit.

A typical lawsuit progresses as follows:

1. You select a court to file your lawsuit in. Select a court (several factors to consider, such as “home court advantage” and the FDCPA, plus statutory requirements such as real estate lien cases)

2. You file legal pleadings, written documents formally stating a legal claim. Specifically, you file a summons and a complaint (along with the required filing fee) with the civil clerk.

* The summons: The summons notifies the defendant that the you’re suing him and provides basic information such as the court location, court telephone, case number, and your name and phone number. It also states how much time the defendant has to file an answer to your complaint (typically 28 days).

* The complaint: The complaint informs the defendant of your cause of action (your specific factual and legal claims) and concludes with a request for money damages. A collection complaint is often only three or four paragraphs long, particularly when a creditor is suing on an unpaid account.

* The exhibits: You also attach relevant exhibits to the complaint, such as the invoices and a statement showing the outstanding balance, delivery receipts showing that the goods were delivered, and the credit application and any contract involved, especially if either one of those documents establishes your right to collect interest or the costs of collection.

3. The civil clerk of the court issues the summons, filling in a case number and a few other details, and either returns it to you to serve on the defendant or turns it over to its own process server (a person authorized to serve court papers) to be formally served.

4. After the defendant has been served, one of two things happens.

* The defendant files an answer, placing the case at issue. The clerk then sets the matter for a hearing or

* The defendant doesn’t file an answer (or other acceptable response) with the court, and you ask the court to enter a default judgment in your favor.

5. After the period for filing an appeal (usually 28 days) expires, the judgment becomes final, and you may proceed with postjudgment collections.

If a defendant answers your complaint but is not amenable to settlement, you’ll have a trial followed by an entry of a judgment by the court. If you win, your judgment will describe the specific amount of money the defendant owes you and establish your legal right to collect that money from him.

Furthermore, your judgment accrues interest at a rate defined by the laws of your state. Translation: The longer the defendant takes to pay, the more money you get. You have the opportunity to enforce the judgment.


At any point during the proceeding, you and the defendant can settle the case. You may agree to dismiss the case for a partial payment of what you believe the defendant owes, a full lump-sum payment, or an installment plan for payment. All courts encourage the parties to a lawsuit to resolve their differences without going to trial.

Include all your theories of recovery, and parties who are liable. The obvious: personal guarantors, general partners, sole proprietor…however, there are many more!

When you file a lawsuit, include as defendants all people who may be responsible for paying the debt. Review your credit file for helpful information. It’s best to add all defendants at the beginning of a lawsuit, right when things get going, so that you can get them all served with copies of the lawsuit and reduce the chances for the litigation to drag out.