What protects creditors from debtors moving to avoid collections?

What protects creditors from debtors moving to avoid collections?

On Behalf of | Aug 25, 2022 | Uncategorized |

The people that owe your business money have an obligation through their contract with your company or have made appropriate payment arrangements for an unexpected debt. Your company deserves payment for the money it loaded or the goods or services it already provided.

The majority of adults will do their best to fulfill their financial obligations, but there are some people who would rather uproot their entire lives than make a payment as required on a debt. Once you realize that a client or debtor is not going to make a reasonable attempt to repay your company, you may decide to take them to court.

Securing a judgment can be a great way to get paid back by someone who has thus far tried to avoid their financial responsibilities. What protects you if that debtor leaves the state where they incurred the debt and you have the judgment and they move to California?

You can domesticate out-of-state judgments

Although the court systems and laws are slightly different in every state, all 50 states are still part of the same country and therefore need to cooperate with one another for criminal and civil matters. An effort to have one state recognize a court ruling from another state will likely result in a domestication hearing.

Businesses with a valid judgment against a non-paying borrower can efficiently make that judgment enforceable in California. In theory, you have the option of relitigating the debt, but that is rarely the most efficient solution.

After all, first, you will need to serve the debtor again. Then you will need to wait for a hearing. You will have to prove the validity of the debt and how they have fallen behind on payments or failed to make arrangements. Domesticating a judgement just requires that you prove the judgment in another state is valid.

Knowing your rights will help you pursue full repayment

Your company shouldn’t have to write off a debt just because the person who owes you money leaves the state where they incurred the debt or where you obtained a judgment against them.

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