How to collect on a debt?

UPDATED: Jan 28, 2011

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How to collect on a debt?

A couple in TX agreed to pay me $10,000 for 2 old catering trucks, several years ago. The amount is too much to bring to small claims court. What do I do? I have called them numerous times to no avail. How can I recover the debt they owe me?

Asked on January 28, 2011 under Bankruptcy Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

The only way to recover the debt if they won't pay voluntarily is to sue. If it's too large for small claims court, you'll need to bring it in municipal, district, or country court. You can retain an attorney to represent you or you can--though it is not advised--represent yourself and sue them pro se. Before doing anything, though, ask yourself:

1) Do they or the business which bought the trucks likely have money (or other assets you could reach)? If they don't have money, then even if you win, you lose--you'll have spent time and money but received nothing. In regards too that, note that if it was bought by an LLC or a corporation, not the people themselves, you can't hold them personally liable--so if the business is gone or broke, there's no recovery.

2) How many years ago? You can only bring a legal action for a specified length of time. Do a websearch for "statute of limitations California" to see the possible time periods. This is most likely an action on a written contract (if there's anything in writing) or an oral one (if not). If too-much time has passed, you can't sue.

3) Getting back to (1), above: if there's a chance to can't collect (no money) and also you'll have to spend at least some time and money to sue--and also, no lawsuit is ever a given that you'll win--you may wish to check with a CPA or other tax professional: if you can somehow write off the loss, you may be better served by taking the tax loss than by suing.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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