Going to court to address debt is sometimes necessary. Businesses dealing with borrowers who default can ask the courts to issue a judgment. A judgment can lead to more effective collection options, including wage garnishment and property liens.
However, civil court judgments do have their limitations. They are usually only enforceable in the state where the litigation occurred. Creditors who discover that a debtor moved to Florida may have a faster option available once they locate the debtor in Florida.
The courts can recognize foreign judgments
For the purposes of debt collection, a foreign judgment is a judgment issued in another state, not necessarily a different country. A valid judgment in favor of the creditor issued in Georgia is potentially eligible for domestication in Florida.
Provided that the creditor follows the right procedure, they can ask the courts to domesticate an out-of-state judgment and allow them to engage in the same collection activity they intended to pursue in the state where they initially filed the lawsuit. They do not actually need to validate the debt or prepare for litigation with the debtor again.
Domestication is generally a faster process than litigating about the debt a second time. It is therefore more cost-effective and may be more likely to result in successful collection efforts. Debtors served with lawsuit paperwork can move or try to drag out the legal process. When a creditor domesticates a foreign judgment, they can move forward with collection efforts relatively quickly.
Discussing business collection concerns with a legal professional can lead to more successful collection efforts. Creditors who domesticate foreign judgments may be able to garnish wages and take other appropriate steps to hold a debtor accountable for the amount they owe.