When individuals or businesses fall behind on their financial obligations, creditors typically engage in collection activity. Collection efforts may begin with reminder phone calls and invoices. Eventually, creditors may decide that they need to take legal action. A debt-related lawsuit can result in a judgment issued by the courts affirming the debt and holding the debtor accountable.
However, civil actions occur on a state-by-state basis. If an individual debtor leaves the state where creditors took legal action and relocates to Florida, then the creditor may have the option of domesticating the foreign judgment issued in another state. Why might creditors domesticate judgments instead of pursuing alternate means of collecting on the debt?
1. A faster overall process
Depending on the number of cases waiting for the attention of a civil court judge, a new civil suit could take months to come to fruition. In a domestication scenario, the process is generally much faster.
The creditor must file paperwork with the courts and provide service to the debtor. The debtor then typically has 30 days to file a response contesting the domestication effort. If they fail to act, the creditor may be able to domesticate the judgment relatively quickly once the 30 days pass.
2. Expanded collection options
Simply tracking a debtor to Florida does not ensure that they pay what they owe. Someone who has previously made attempts to avoid financial responsibility may continue to avoid their obligations if at all possible. Creditors who successfully domesticate judgments may be able to garnish wages or take other aggressive collection steps instead of just sending invoices or making phone calls.
3. Reduced defense options
Debtors can often fight back during the debt collection process, even if a creditor takes them to court. Debtors might try to challenge the validity of the debt or insist that mistakes on the part of the creditor limit their collection options. In a domestication scenario, there are fewer ways for debtors to challenge the claims of the creditor and attempt to avoid financial responsibility.
If creditors have professional assistance while domesticating a foreign judgment, they can outsource almost the entire process. Evaluating different solutions for dealing with outstanding debts can help creditors hold debtors accountable despite their attempts to avoid financial responsibility.
