When debtors refuse to pay the debt they owe, creditors can file a lawsuit against the individual to seek a judgment issued by a court. That judgment orders the debtor to pay reparations. Unfortunately, debtors still do not always pay that debt, and a judgment in South Carolina is only valid for ten (10) years. In these cases, creditors can take other legal actions to collect on their debt.
Although litigation is a possibility, it is not necessary in every case. In many cases, the creditor’s attorney can negotiate with the debtor to secure a fair amount of the debt. Debt collection always has a better chance when you have legal help. At Beth Santilli Law, our collections and judgment enforcement attorneys in Mt. Pleasant, SC can provide you with the counsel you need.
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Prior to entering litigation, all creditors should attempt to work with the debtor to secure the debt owed. Debt settlement is an option that allows the debtor to pay a portion of the debt due, but they usually must pay it in one lump sum. Many debtors do not have the financial capacity to make one large payment—so a payment plan may be more appropriate.
Payment plans, also called debt management, typically spreads out a debtor’s owed amount by extending payment terms. This allows the creditor to receive the full amount of debt owed, although it does take them longer to receive it.
These workouts require the execution of documents to ensure that the payment plan will be enforced by the court in case the debtor defaults. For example, a creditor can require a confession of judgment to secure any payment plan which can be filed with the court providing an instantaneous judgment against the debtor for default without going through a protracted court battle. A knowledgeable attorney is well aware of the importance of these documents. Beth Santilli Law can help you draft these documents, get them executed, and filed with the court if necessary.
Supplemental Proceedings
When a writ of execution fails to demonstrate that the debtor holds title to assets that can be seized, a creditor may seek a supplemental proceeding by petitioning the court for relief and an order of reference with the judge, known as the master in equity. After the Complaint is served on the debtor, there is a proceeding that allows the creditor to question the -debtor about their assets that can be collected upon. Creditors can also ask the debtor to present evidence, such as bank statements, accounts receivable, notes payable, ownership in stocks, bonds, or securities, tax records, and other financial documents.
Additional Collection Options
Creditors have many legal options available to them when they are trying to collect from a debtor. These include:
– Asset searches. With an asset search, creditors can uncover the value and any liabilities that are tied to a property.
– Debtor exams. These are special proceedings that provide creditors with an opportunity to determine ways it can collect a debt, such as attaching funds in a bank account, trust, or business.
– Receiverships. A receivership is a court-appointed individual who acts as a custodian of the property of the debtor, including tangible and intangible assets and rights, to protect those assets from being liquidated or wasted by the debtor.
– Charging orders. These orders are court-authorized liens imposed by creditors on distributions made from business entities. In these cases, the debtor is typically a member, partner, or the owner of the business entity.
– Judgment lien of foreclosure. A judgment lien of foreclosure gives creditors the right to take possession of real or personal property. When debtors fail to pay their obligations, the creditor that obtained the judgment lien of foreclosure can foreclose on their property.
When seeking judgments or orders, working with a collections and judgment enforcement attorney can help to better your chances of collecting on a debt.
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It is frustrating for all parties when a debtor does not pay their obligations, but there are measures creditors can take to recover that debt. At Beth Santilli Law, LLC, our Mt. Pleasant, SC collections and judgment enforcement attorneys are here to help. We can review your case, advise you of your options, and assist you with the entire process. Contact us today to request a consultation.
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