There are three essential points to consider before you take the step of bringing your case to court in order to collect a debt:
● Determine whether you have a solid case.
● Ask yourself if you can accept the notion of going to mediation or agreeing to a compromise settlement.
● Consider whether you will be able to collect if you win your case.
To decide if your case is worth pursuing, consider the elements that apply to your type of lawsuit. For example, the term “breach of contract” would apply if a contractor you hired did substandard work and the elements discussed below are present.
What you will have to do
In order to succeed, you must prove that the agreement you have with the other party is legally binding, which will not be difficult to do if you have a written contract. If that is lacking, you must show that such a contract is implied by the circumstances of the case, or that an existing oral contract is enforceable. You also have to show that you complied fully with the contract’s terms, such as making your payments in a timely manner.
At the same time, you also have to show that the individual you plan on suing did not comply with those terms, and this is usually the basis for a lawsuit. In addition, you must also establish that because of the other party’s lack of compliance with the contract, you suffered economic hardship. In a case where a contractor’s work has to be completed or redone, this is relatively easy to establish.
Collecting the debt
Next, it is virtually impossible to overstate the significance of your ability to collect when you plan on taking another party to court. Of course, although most reputable people and companies are willing to pay what is owed, this will not be possible if they lack the necessary funds. Note that if your opponent does nothing, the court is not responsible for collections and can provide little assistance.
Generally speaking, if your opponent has valuable assets, including investments or land, or is employed, collection of what is owed to you is relatively easy. In this situation, your local marshal or sheriff can attach their non-exempt property or garnish their wages at your request.
If the other party is a successful business, particularly one receiving cash directly from those who patronize it, you can authorize your local law enforcement agent to collect the amount you are owed. And in many parts of the country, if you sue someone in business who has a state license, you can take steps to suspend that license until you receive payment.
When you find that you are unable to identify a collection source, which can happen if your opponent is an unlicensed, insolvent contractor, there is virtually no point in going to court because the individual or business you are dealing with may declare bankruptcy or simply “disappear.”
Finally, as an alternative you can hire a neutral third party to assist both you and the other party in finding a solution that both of you can accept. Also, especially if it is part of your contract, you may be able to settle your disagreement through binding arbitration.
An attorney specializing in civil law can help you decide the best course of action for your unique circumstances.