How to collect on a debt?
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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 10 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.
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