Trying to collect from deadbeats can be frustrating. As any small business knows, sometimes the time and effort needed to collect from a debtor isn’t worth the amount of money in question. Other times, the amount is substantial enough to warrant a debt collection lawsuit.
Suing someone over an unpaid debt is a way to create a court record of the debt and the debtor’s legal obligation to pay it. Courtroom success also opens the door to collection strategies that would otherwise not be allowed.
All of that being the case, it’s smart to study before going to civil court. There is plenty to know about civil litigation, including all the terms one encounters along the way. Here is a small sampling of some of the key terms anyone would be wise to learn before going to court:
1. Judgment
Civil courts do not render guilty or innocent verdicts. Rather, they render judgments. A judgment is the court’s decision in a civil case. In a debt collection case, a court could find in the plaintiff’s favor, thereby awarding the amount owed plus court costs, attorneys fees, penalties, and interest. But the court could also rule in favor of the defendant. Whatever the court’s ruling might be is considered the judgment.
2. Judgment Creditor
In a debt collection case, the judgment creditor is the person to whom the monetary award is due. In nearly all cases, this is the plaintiff. The plaintiff sues the defendant in order to get paid an outstanding debt. Upon winning the case, the plaintiff becomes the judgment creditor.
3. Judgment Debtor
The judgment debtor in a debt collection case is the losing party. This is the person required to pay the monetary award. In nearly every case, the judgment debtor is the defendant.
4. Debtor’s Examination
A debtor’s examination is a legal process through which a judgment debtor is required to truthfully report all income and assets. In some states, debtors also report their current debt loads. Debtor’s examinations can take many forms depending on a state’s rules for civil litigation.
A typical scenario would involve both the debtor and creditor returning to court after the original judgment is entered. Under the supervision of a court officer, the debtor or his attorney would report all relevant information. A court stenographer would enter all the information into the official court record.
5. Interrogatories
Some states prefer the use of interrogatories before moving to the debtor’s examination. In simple terms, interrogatories are a series of questions pertaining to the debtor’s assets. A creditor submits the questions through his attorney. Likewise, the debtor answers the questions and sends them back through his attorney. Creditors use interrogatories to determine how to proceed with collection efforts.
6. Garnishment
Garnishment is a process whereby a judgment creditor is allowed to take a certain portion of the debtor’s wages and/or bank deposits to pay the judgment. Judgment Collectors, a collection agency based in Salt Lake City, Utah, says that garnishment varies among the states. Each state has its own rules.
7. Writ of Execution
Finally, a writ of execution is a legal document establishing the judgment creditor’s authority to seize and sell nonexempt property. Such writs are necessary to go after a debtor’s real estate, stocks, collectibles, etc.
There are a ton of other terms to know before going to civil court. Those listed in this post are enough to get you started if you’re seriously considering filing a debt collection lawsuit. Just be sure to know what you’re getting into before you file.
