Send a demand letter to the borrower. To establish that a debt is owed and is past due, you should send by certified mail a letter stating the exact amount owed and any interest or penalties. The letter should also tell the borrower that if the debt is not paid by a certain date, a lawsuit will follow. Often, a demand letter is enough to prompt the borrower to contact you about a payment or installment plan to resolve the dispute.
Choose your court. If the amount of the debt is under a certain amount (usually $10,000, $7,500 or $5,000, depending upon your state's rules), you may be able to pursue your claim in small claims court. Small claims court procedures are less formal and quicker than a traditional civil court, and you usually won't need to pay for an attorney. But if the unpaid debt is a higher amount or includes more than just monetary damages, you may have to seek recourse in civil court.
File the complaint. For a small claims lawsuit, you can visit your local courthouse for a small claims booklet and forms instructing you on how to begin your suit for unpaid debt. For both small claims and civil suits, a complaint will need to be filed detailing the amount of the debt, the circumstances giving rise to the debt, the identity of the debtor and any additional damages claimed. Attach any receipts, correspondence, contracts or other evidence that support your claim for unpaid debt.
Serve the defendant with the complaint. If the defendant is an individual, you can serve the complaint personally by certified mail or process server. If the debtor is a business or corporation, you will need to serve the complaint on the company's registered agent. You can find out the agent's name and contact information by calling your state's department of commerce or the secretary of state's office.
Once the complaint is filed and the defendant served, prepare for court. The court clerk will give you a court date after the complaint is filed. Prepare for court by gathering witnesses and evidence that support your claim. Briefly and succinctly explain to the court the circumstances surrounding the debt and your efforts to collect the money. Enter your demand letter as evidence that you tried to collect the debt without court intervention. The court will listen to both sides before issuing a ruling.
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