When informal efforts to collect an unpaid debt fail, your only option may be to turn to your local court system for recourse. Before you take the debtor to court, however, you should be aware of your options in litigating a debt collection lawsuit, and the potential benefits of doing so.
In most jurisdictions, there are a number of ways that you can go about filing a lawsuit to collect a debt. First, you can always hire an attorney directly to file the lawsuit and litigate the suit on your behalf, and try to recoup your attorneys' fees through the lawsuit. Next, you can contract with a collection agency to file and litigate the debt collection lawsuit, which may involve attorneys' fees and/or collection agency costs. Finally, for smaller debts, many jurisdictions operate a small claims court, which is specifically designed for people to represent themselves in certain types of lawsuits, including debt collection. In this case, you would complete the necessary paperwork to file the lawsuit, and represent yourself in court. If you have a larger debt, however, you are likely to need the assistance of an attorney.
However you choose to file your debt collection lawsuit, you will have to pay the court filing fees up front, and perhaps a fee for service of process, which will vary according to the state and the court in which your lawsuit is filed. In many cases, you will be able to collect these fees as a part of your lawsuit, depending in the nature of your debt and your jurisdiction. If you hire an attorney or collection agency to file and litigate the lawsuit, then you will incur attorneys' fees, and perhaps a fee for the collection agency's effort, as well. Again, you may be able to recover these fees through the lawsuit, depending on your situation.
After your lawsuit is filed and the debtor is served with notice of the lawsuit, the court will schedule a court date, which can happen in a matter of weeks or months, depending on your jurisdiction. At the court hearing, you will need to provide the court with documentation of the debt. This can be in the form of documentary evidence, such as a written contract for services, or witness testimony. If the court is satisfied that the debt is owed to you, the court will enter judgment in your favor, and may have the debtor make payment arrangements.
In the case of larger debts, or contested debt collection actions, you would be wise to retain an attorney to represent you in order to ensure that you take all actions necessary to obtain a judgment against the debtor and effectively collect your unpaid debt. An attorney can handle all of the paperwork and guide you through the court's procedures, which may be unfamiliar to you.