Collecting outstanding debts is time-consuming and frustrating. You’ve heard every excuse while the debtor keeps delaying payment.
So, what happens when the debtor pulls up stakes and moves to another state? Did you lose your opportunity for restitution?
Jurisdictional issues
The process of collecting a debt after the debtor relocates to another state is complex and challenging. Different states have their own laws regarding debt collection. It’s essential to determine which state’s laws will oversee the matter.
Start by reviewing the original contract with the debtor. Many contracts include provisions to prevent jurisdictional disputes:
- Choice of Law clause determines which state’s laws govern the contract.
- Choice of Forum clause specifies the jurisdiction where disputes must be litigated.
These clauses can help you keep the case in Florida, even if the debtor has relocated.
If the debtor has moved to one of the 47 states that have adopted the Uniform Enforcement of Foreign Judgments Act (UEFJA), the process of collecting debt across state lines becomes easier.
- The creditor needs to secure a certified copy of the judgment from the court where it was issued.
- The judgment is registered with the relevant court in the debtor’s new state.
- The creditor notifies the debtor of the judgment registration. Failing to comply with notification rules could lead to delays or invalidate the registration.
- Observe the state’s mandatory waiting period before enforcing the judgment.
During the waiting period, the debtor has the right to contest the entry or enforcement of the domesticated judgment.
Navigating the complexities of debt collection across state lines is not an easy task. Working with a legal professional can help ensure compliance with relevant laws and regulations. They can also take care of any obstacles that may arise during judgment registration and enforcement and maximize the likelihood of collecting the debt you are owed.
