Collecting payment in full for debts can be incredibly challenging. Some people do not care about how their failure to fulfill their obligations could impact others. There are even those who intentionally default on their debts and make aggressive moves to try to avoid financial responsibility.
People return mail, change phone numbers or even quit their jobs to avoid debt collection efforts. Frustrated creditors may eventually decide to take legal action. They may file lawsuits that allow them to place liens against property or garnish a debtor’s wages.
A successful collections lawsuit can help make it easier to compel people to fulfill their financial obligations. However, a debtor that who loses a lawsuit may try to avoid enforcement actions by leaving the state where the lawsuit occurred. What happens after a debtor relocates to another state?
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Creditors can ask the courts for support
The first step toward demanding payment from a debtor willing to leave the state to avoid responsibility is to locate them. Once they have crossed state lines, the jurisdiction for civil litigation changes as well.
A judgment from a creditor lawsuit from Nevada is usually only enforceable in Nevada. Once the debtor moves to California, the prior judgment may not be enforceable in the new jurisdiction. Creditors may feel frustrated about the time and money involved in litigating a collections issue a second time.
Thankfully, they generally do not need to sue the same debtor in another state after they relocate to avoid responsibility. Creditors can instead domesticate the foreign judgment. State laws allow civil courts to acknowledge judgments issued by other jurisdictions.
A business that follows the correct procedures to domesticate an out-of-state judgment in California can generally perform the same types of collection activity that the company intended to pursue in the original jurisdiction. Also, the process of domesticating a foreign judgment is usually much faster and more cost-effective than pursuing a second lawsuit against the same debtor.
Therefore, businesses should consult with experienced collections counsel when determining the best course of action to pursue a debt or enforce a judgment against a debtor that has moved to a different state.