How Can I Collect a Debt From Someone?

One of the most difficult situations to manage is when someone owes you a personal debt and you need to collect. It is particularly challenging when the borrower is someone near and dear to you. However, when it's time to collect you must learn how to do so in an efficient and professional manner. If you are unsuccessful in your attempts, you can get help from the courts.

First Contact

Just as a business lender attempts to make contact with the borrower who owes a debt before taking additional steps, it is important to first try to communicate with the person who owes you money. That may include placing a call, making a visit, writing a letter or even sending an email. An email or letter is advised because it provides a paper trail to prove you attempted to collect the debt on your own before taking the matter to court.

Small Claims Court

The next step in collecting a debt from someone is to file a case in small claims court. In most cases, you must open a case in the county where the borrower resides. You must provide a statement of the situation regarding the loan and include any preliminary proof of the case, such as a promissory note. The court schedules a hearing date to determine a judgment. State maximum claim recovery amounts for small claims cases vary up to $15,000.

Preparing a Case

Leading up to the small claims hearing, you must prepare your case. That includes documenting what has occurred since you lent the money, putting the signed promissory note among your evidence and gathering proof of communications you've had with the borrower. You must bring this information and prepare a verbal statement to make at court in relation to the case to win a judgment. In some cases, the borrower will attempt to settle the debt before going to the hearing.

Collecting

If you win, the court judgment gives you the legal right to collect funds from the borrower. The court usually allows the other party to appeal within about 30 days; you must wait before starting collection procedures. In some cases the borrower will send a check to cover the judgment, but if you do not receive the money you must contact the courts to proceed with collections activities against the individual. That includes submitting information about the debt to the borrower's credit report, placing a lien on the borrower's property and in some cases garnishing his wages or bank accounts until the debt is repaid.