What Happens When a Debtor Stops Making Payments?

What Happens When a Debtor Stops Making Payments?

On Behalf of | Feb 10, 2016 | Business

Generally speaking, the creditor / debtor relationship starts out on good terms.Perhaps someone decides to loan someone else some money, maybe a friend, maybe a relative, maybe a small investment into a friend’s business.Or maybe it is a business entering into a contract with another business for goods sold or services rendered. The money is lent and/or the goods or services are provided. Eventually, however, the other shoe drops – the debtor stops making payments and as the lender, you’re left with nothing.

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Sometimes the non-payer is in communication (making promises, asking for time to make payments). Other times (and this can even be the case with a deal between friends!) they drop off the face of the Earth and go radio silent. What is your recourse?

File a lawsuit. And don’t delay. If a party does not commence its lawsuit by that time, then, under the statute of limitations, they are barred from suing to collect upon the unpaid debt (absent certain exceptions like waiver or partial payment which an experienced collections attorney can discuss with you in further detail).

Once you hire an attorney to commence the suit and start the process of getting your money back, a few scenarios may arise. For example, sometimes the defendant fails to answer your lawfully served complaint and your lawyer obtains a default judgment for you (a judgment in the plaintiff’s favor when the defendant has not responded to a summons and complaint or has failed to appear before a court of law to seek relief). Other times, you have to go all the way to trial (and even an appeal occasionally) before you end up with your money judgment – in the form of a piece of paper. Next up is ensuring your attorney can help you collect on that piece of paper.

For more information on how to turn a money judgment into cash for you, the judgment creditor, contact aggressive Los Angeles collections attorney Ronald Slates today.