In which state should I sue a debtor to collect on a promissory note ifI live in one state and the debtor lives in another?

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In which state should I sue a debtor to collect on a promissory note ifI live in one state and the debtor lives in another?

I live in CA; debtor lives in TX. Terms of the promissory note state it will be “interpreted under the laws of CA”. I’m concerned that if sued in CA, and I receive a favorable ruling (e.g. lien on real property, attachment of wages, etc.), it may not be enforceable in TX. I’d prefer to file suit in CA because it’s my home state.

Asked on June 20, 2011 under Bankruptcy Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The basic question for suing the person who has not paid on the promissory note is where was the promissory note signed and where was the obligation entered into, California or Texas?

The term "interpreted under the laws of CA" stated in your question suggests that the contract on the promissory note was entered by the person who owes you money in California and if so, filing suit in the State of California would appear to be the way to go.

The problem with any lawsuit is two fold. First getting a judgment and second, collecting upon it. Does the person who owes you money have real property or other assets in the State of California or is all that he or she owns in Texas? If there are assets in California belonging to the person owing money to you, you have a better chance of getting payment on any judgment you might get.

Regarding enforceability of a California judgment in the State of Texas, you would have to do further research if Texas would honor a California judgment. Good luck in getting money owed you.


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