How to Obtain a Legal Judgment for a Defaulted Loan

Lending money is a lot like gambling. While you may improve your odds of winning, there's always the risk that you'll walk away with nothing. For creditors, multiple failed attempts to recover payment from a debtor sometimes make it necessary to get the courts involved. As a creditor, if you can get the court to issue a judgment in your favor, you may use that judgment to obtain a judgment lien or even garnishment the debtor's wages.

Instructions

1

Draft your complaint. You cannot obtain a judgment without first suing the debtor by filing a complaint against them in court. The complaint is a document explaining the legal and factual basis of your lawsuit. This is where you tell the court what you want. The complaint must put the debtor on notice of what she's being sued for. Improperly drafting a complaint can result in your case being dismissed; accordingly, you should consult with an attorney in your state if you wish to sue someone.

2

Determine where the debtor lives. While every state is different, the general rule is that civil actions, like debt collection lawsuits, must be filed in the county where the debtor resides. Accordingly, you must know the debtor's address and county.

3

Pick a court. As a creditor, you may have multiple options when it comes to choosing which court to sue the debtor in. A few options include Magistrate, State and Superior Court. Your choice will likely depend on factors such as the amount you're attempting to recover, type of relief you want the court to grant and the legal basis of the debt.

4

File your complaint. Once you draft a complaint, determine where the debtor lives and choose the court, you must file the complaint with the court. Unless you can show the court you lack financial means, you must also pay the court's filing fee.

5

Serve the debtor. Every party to a lawsuit has the right to know she is being sued so that she may defend herself. The process of giving this notice is called service of process. Once you file your complaint, either a sheriff or a process server must hand-deliver the complaint to the debtor or someone authorized to receive service on her behalf.

6

Persuade the court. The final step to obtaining a legal judgment is to convince the court that you should get it. Depending upon which court you filed in, you may have to convince either a judge or jury. At minimum, be prepared to show that the debtor owes you money and has not paid it. Documents such as loan agreements and contracts can help prove the debt. Additionally, you may be able to use your accounting records or the debtor's own testimony to show that you have not received payment from the debtor.