Where Do We Sue

Over 90% of the time, we sue where the debtor is located

  • Federal law requires this unless there is a signed agreement stating otherwise
  • Court ordered Judgment collection efforts can begin immediately where debtor’s assets are
  • The attorney who got the judgment will do the judgment collection

Some clients have contracts or credit applications that says the venue and jurisdiction is where the creditor is located

  • This makes it harder for the debtor to defend the lawsuit.
    • They have to hire an attorney at that location
    • and travel to the court to be a witness if there is a trial
  • This is advantageous if there is a dispute
  • It also makes it less likely they will defend the lawsuit just to delay when a judgment is issued
  • However, it can be more expensive and take longer than if we sue where the debtor is located
    • If the debtor does not voluntarily pay after we get the judgment, then we have to conduct court ordered judgment collection activities where the debtor and their assets are located
    • This requires hiring an attorney where debtor is located
    • We also have to domesticate the judgment from client’s state to debtor’s state
      • Typically 2 to 4 months
      • Typically $250 to $500
    • The attorney hired to do the lawsuit in client’s location will typically want a non-contingent fee
      • The attorney understands that if debtor does not voluntarily pay, the judgment has to get domesticated to another state and therefore the attorney has less chance of earning a contingency fee on collections and thus the need to charge a non-contingent fee.

Even when our client has a provision that says we are to litigate where the client is located, we frequently ask our client if they want to consider suing where the debtor is located to avoid the extra costs and delays that might result if we sue at the creditor’s location.  Most of the time our clients choose this alternative since they don’t think the debtor will defend the lawsuit or has any valid claims for not paying.  However, if the debtor shows the judge that venue is supposed to be in our client’s location, the judge can dismiss the lawsuit and we have to start over where the creditor is located.  This has only happened to us once.  Most debtors are more worried that our client would file the lawsuit again, making it even more expensive for the debtor to defend, so they tend to just let the lawsuit continue where we filed it originally.