How Large Does a Debt Have to Be to Be Sued?

Creditors have the ability to sue for an unpaid debt. Some debt allows creditors to take immediate action if it is not paid -- most contracts give creditors the right to seize collateral like a house instead of filing a lawsuit. But if there is no collateral for the debt, or if the collateral does not pay off the debt entirely, creditors may sue for the remaining debt owed, even if the debt is only a small amount.

Types of Lawsuits

There are several types of lawsuits common for individual debt. When property is involved, a creditor can place a lien on the property, or a claim to its worth that allows that creditor to file a lawsuit to collect the debt. Contractors that work on property but are not paid can also file liens and lawsuits. Lawsuits not associated with property are more rare, and are generally connected with credit card debts that debtors have not paid back as required. Credit card debt is the most common type of unsecured debt.

Right to Sue

Creditors have a right to sue for debt because of the language they use in their contracts. From this perspective, it does not matter how large a debt is. There is no overarching amount that a debt must be before a creditor can file a suit to collect on it. Credit card debts tend to be smaller while property or car-based debts tend to be larger, but in either case the creditor has the right to sue. The amount of the debt is not usually important from a legal standpoint.

General Practices

Although the amount of the debt may not be very important when it comes to the law, it can be very important to the creditors themselves. Lawsuits can be time-consuming and expensive, so creditors generally will not attempt to collect on a debt that they cannot make money from -- they will usually sell the debt to a collection agency, which will use its own rubric to decide whether or not to sue for the debt. In these cases, it is rare that creditors will sue for less than $1,000 of debt, because the suit would incur more costs than money collected.

Additional Requirements

While the size of a debt can vary, there are laws controlling how long creditors have to sue for an unpaid debt under a contract. No matter how large the debt, if the creditor does not act quickly enough it cannot sue for the debt. Time frames vary widely between states, ranging from three years to 15 years, but after the period is over a lawsuit is no longer possible.