Suing for Unpaid Debt

Businesses and Debt

Both private and public businesses are charged with the responsibility to render services and provide goods in a way that satisfies customers.   When payment is not received, a business has recourse against its clients under the law to pursue and collect monies owed.

When To Sue for Unpaid Debt

A business may sue for unpaid debt once other available options for collection have been exhausted.   If a customer has received a service or product, even if he or she claims the product to be defective, he or she is liable for paying or returning the product within a reasonable period of time.   The period during which a customer must pay or return the product varies by state.   In order to sue, a business must file a complaint with the courthouse. Any complaint must be served personally by an officer of the court, not just sent, to the customer, at which point the customer has thirty days to respond to the complaint.   Should the case remain unsettled at this point, both parties will meet in court and a judgment will be rendered.

Process for Collecting Unpaid Debt

Businesses have several options at their disposal when it comes to dealing with unpaid bills for services or goods.   Before a lawsuit is even filed, a business may choose to negotiate directly with a customer, to turn the matter over to a collection agency, to pursue a lien on a customer’s property, even to begin bankruptcy proceedings against the assets of a customer.   Two pre-judgment options the courts offer before a lawsuit are replevin and attachment.   Replevin allows a business to take hold of the titles to properties or assets belonging to a customer until the debt is paid, and attachment allows the business to take the actual property.   If these options do not work, a business is afforded the court-based option of a lawsuit.   When the case is won, or if the customer does not contest a charge, the business is entitled to the judgment.

What Does a Lawsuit Mean for the Consumer?

In the case of a lawsuit, the creditor bears the responsibility of proving that the consumer owes the debt. If the business proves that the consumer owes the debt, the consumer must either pay the debt or raise and prove a defense that would relieve them of their debt.

The consumer may not be subject to a lawsuit under certain circumstances.   There is a limited amount of time during which one can be sued for a debt to a company, after which the company is prohibited from contacting the party for repayment.   A lawyer can help a customer to explore the statutes of limitations pertaining to the money owed for goods and services rendered—and a delinquent customer may find himself protected, unable to be pursued for payment.

How Can A Customer Respond?  

Determining when a response is due and what kind of answer must be filed are important decisions to make, and qualified lawyers can aid a consumer in making the correct one.   A customer is responsible for either admitting or denying the charges leveled.       Copies of the response should be filed with the lawyer, sent to the court, and forwarded to the plaintiff.   Many times, a customer’s attorney will contact the businesses and, through a series of meetings or court hearings, determine the best way to settle a suit out of court.   Should the matter go to court, a judge or jury is responsible for deciding the case in the favor of the plaintiff or the defendant.  

Finding Legal Help

Whether or not a customer believes he or she owes payment, a lawyer should be contacted immediately to help with the matter.   An attorney may advise a customer to settle out of court, or he may help the customer understand his or her responsibilities to the business and the court.

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