What to do Regarding Unpaid Child Support or with an Unpaid Judgment
One somewhat uncomfortable subject that we get tons of questions about at Wakefield Law is what to do when you are owed money, but the person or company who owes the money will not willingly pay the money. Our firm has specialized, among other areas, in collecting unpaid debts for more than the past three decades. The Virginia court system has a multitude of tools available to people who are owed money, or creditors, and what we have found over the decades is it comes down to two things: 1) understanding the system and the tools available, and 2) being persistent!
So, this week’s article will focus on someone who is either owed unpaid child support, or someone who has obtained a judgment indicating that someone owes them money. We often say to clients, the paper that a judge endorses indicating that the person who owes money, or the debtor, has been found liable for the debt is not worth the paper it’s written on until the debt has been collected. Whether we are hired from the beginning, or hired after the judgment has been entered in a creditor’s favor, this is where our work to collect the money begins.
FDCPA Compliant Demand Letter:
A critical part, and often the first part, of the debt or judgment collection process is making demand upon the debtor. If our client has obtained a judgment for unpaid support payments and has hired our law firm, we are technically classified as a “debt collector” under the Federal Debt Collection Practices Act, and our firm must abide by all rules in the Act. Aside from complying with federal law, we find this initial contact by letter to be a productive step because it notifies the debtor, or their lawyer if one is involved, that our firm has been hired to collect the amount owed, and will take whatever legal action is necessary to get the debt collected. Frequently, this will start communication between our firm and the debtor, or their advocate, and an amicable payment plan or settlement negotiation can begin. Often the mere involvement of our firm to show that this matter will be taken seriously can lead to a constructive conversation regarding resolution. However, what happens if no response is received to our initial letter?
Litigation:
Litigation is the strongest tool in a lawyers toolbelt. Often, our firm gets asked what the difference is between our collection efforts and a collection agency’s efforts. There are many, but the largest difference is our firm’s ability to move a dispute into a court atmosphere quickly and easily. When willing negotiation and resolution are not on the table, our firm has copious experience in using the court system to collect debts.
If no judgment has been entered, the lawsuit that is filed when an individual is owed money is called a Warrant in Debt in the General District Court. The General District Court is the lower court in Virginia, and there are limits to the dollar figures that can be sued for. However, very recently the jurisdictional limit was increased to $50,000.00. If the amount in question is greater than $50,000.00, the matter needs to be filed in a Virginia Circuit Court.
If a judgment has already been obtained, we enter the realm of post-judgment collection litigation. Tools such as summonses into court to answer questions about a debtor’s assets, subpoenas for all financial documents, garnishments on employment and bank accounts, and other tools are all available to judgment creditors. We use all tools available to us to get our clients’ debts and judgments collected, but always are open to negotiation and payment plans if they work for all the parties.
What to do when the Debt is Paid:
This is another rarely spoken about concept. If a debt is paid, many additional steps arise. One of the first important questions is whether the payments have fully cleared before any other steps are taken. Our firm always gives payments time to clear before dismissing court dates or filing paperwork with the court. A frequently made mistake is relying on checks or credit card payments that are vulnerable to unsuccessful clearance and dismissing proceedings. However, if the payments have been made and the payments have cleared, it is a creditor’s responsibility to dismiss the proceedings against a debtor and file paperwork to either mark the debt paid or satisfied. In the General District Court, we file a document called a Notice of Satisfaction to mark judgments paid. In the Circuit Court, a Release of Judgment is filed to mark a judgment paid. If a judgment is paid within thirty days of entry, it may be possible to vacate a judgment, or make it like it never was entered, but that is a concept for another article.
While these subjects can be uncomfortable, turning a judgment on paper into collected funds is one of our firm’s specialties. Give us a call at Wakefield Law to see if we can help you! 703-771-9740.