Default Judgments, What to Do When the Debtor Won't Pay

No one likes to pay their bills. However, some customers not only dislike paying their bills, but they refuse to pay what they owe. These customers can significantly hurt a company's profit, making it much more difficult to succeed in an already difficult economy.

Fortunately, businesses do not have to sit back and allow irresponsible customers to take advantage of them. There are steps that companies can take to recoup from their losses and collect what they are owed, even from customers who refuse to take responsibility of their bills.

After weeks, or even months, of attempting to recover payment from an unresponsive customer, it is time to take action. A customer that is impossible to contact, does not respond to written correspondence, and has failed to send payment after having ample time to do so, does not intend to pay their bill. Most companies are simply not equipped to deal with these types of customers themselves. This is why it is important to contact a debt collection company.

An experienced debt collection company will be much more equipped to handle a nonpaying client. The professionals employed by these companies are trained to effectively collect payment from customers who are otherwise ignoring the situation or refusing to pay. Seeking the help of a skilled debt collector is the best chance that a company has to recover an outstanding debt.

In the event that a debt collector is also finding it difficult to collect payment from a customer, there is legal action that can be taken. In order to collect payment, a company is able to file a summons and complaint against the client in court. If, after being summonsed to court, the debtor fails to respond or answer, the company will then receive a default judgement.

A default judgement means that the court has automatically ruled in favor of the creditor, or plaintiff, because the defendant has failed to answer the summons and defend him or herself. The defendant, or debtor, will then be forced, by law, to repay their creditor. Once the judgement is given, the court clerk must sign and file the judgement. The judgement will then be docketed and can be enforced.

To collect the amount owed, the company should then request that the court require the debtor to fill out a Financial Disclosure Form. This form will provide the creditor with the debtor’s financial information and must be returned to the court within ten days.

If a debtor still fails to acknowledge the judgement or return the Financial Disclosure Form, the creditor can then ask the court to contact the debtor. The debtor must provide a valid reason for ignoring court’s orders or they may face imprisonment and/or heavy fines.

While obtaining a default judgement will ensure that a company is repaid, this process can be time consuming. To avoid legal action, a creditor will want to contact an experienced debt collection company, like National collection agency, to collect the debt. National Collection Agency is a company that is dedicated to meeting the needs of their clients by collecting payment from the most difficult of debtors. By contacting National Collection Agency, creditors can recover outstanding debts, without putting in the time and effort into going to court.