It is not unusual for consumers heavily in debt to ignore efforts to try to collect. Creditors only wait so long before sending bills to collection. But even going the collection route doesn’t always succeed. That is why some creditors skip collection and go right to civil court.
Filing a civil lawsuit against a dead-beat debtor is considered a step above standard collection. But creditors need not go through standard collection before filing a suit. They can skip the collection process altogether. Some do for the simple fact that debt collection rules are different after a civil lawsuit.
Standard Debt Collection Rules
For the purposes of this post, ‘standard debt collection’ is defined as the traditional debt collection strategies employed by creditors and collection agencies. They include sending invoices and notices via snail mail, contacting debtors over the phone, sending emails, etc.
Consumer protection rules instituted decades ago protect consumers against abusive collection efforts. As just one example, calling a debtor in the middle of the night – with the understanding that he is quite likely to be home – is not allowed. Neither is showing up at a debtor’s workplace and harassing him.
Unfortunately, the same rules designed to protect consumers against abusive collection practices also hamstring debt collectors. There is little they can do when a debtor ignores phone calls, emails, and snail mail notices. Standard collection quickly becomes a stalemate once debtors realize then all they need to do is ignore their creditors.
Filing a Civil Lawsuit
Creditors can try standard collection and get nowhere. Civil court is always an option. Creditors can file lawsuits against debtors with the goal of winning monetary awards. A typical monetary award includes the original amount owed plus interest, late fees, attorneys’ fees, and court costs.
Winning a court case gives the creditor a legal right to collect. That right existed before, but winning in court has a more important benefit: it gives a creditor access to collection tools that were otherwise off limits. This is the very reason creditors choose to take debtors to court.
Those tools include:
- Garnishment – Garnishment is the practice of seizing a certain amount of a debtor’s paycheck and/or bank accounts for payment of an outstanding bill.
- Property Liens – Property liens establish a financial interest in personal property. With a lien in place, a creditor has guaranteed some sort of payment should the debtor decide to sell or transfer the attached property.
- Sale and Seizure – Through what is known as a writ of execution, creditors can have debtor property seized and sold to pay the outstanding debt.
These three tools are far more effective at motivating debtors to pay than simple emails and snail mail notices. A debtor can ignore emails all day long. He cannot ignore the local sheriff seizing his property and selling it.
Collecting After a Court Case
Collecting a monetary award after a court case still is not easy. And in fact, some creditors are smart enough to bring in judgment collection agencies like Utah-based Judgment Collectors. A collection agency focusing exclusively on judgments stands a better chance of collecting debts in full.
Regardless, having access to the additional tools is what motivates creditors to turn to civil court. They are still limited by certain consumer protection rules but being given access to things like property liens and writs of execution make all the difference in the world.
As a debtor, you might get away with ignoring your creditors indefinitely. But you might not. Some of your creditors might decide to take you to civil court. It is a whole new ball game then.
