The truth of the matter is that we have all owed a person some amount of money we did not know how to pay back. You may probably have someone on your call log that you kept sending to voicemail every time he or she called because you knew it was to remind you that you owe him or her some money. However harmless this may seem, it can actually land you in the courtroom. Let us look at a few things you might have not known about debt.
Debt is anything that you may owe another person especially in form of money. It actually goes both ways, you may owe someone money or a person may owe you money. To the person whom you owe money, you are a creditor. The person who owes you money becomes your debtor.
Instances when a creditor can file a lawsuit
This happens when the creditor, or the person or agency that you owe money, files a complaint or a petition with a court of law against you. The creditor then goes ahead and hands you a copy of the complaint. The complaint serves to notify that you are being sued and the reasons why the creditor is suing you. Once you receive notification of a suit, you are supposed to give, by law, a response within 20-30 days of receiving the complaint. If you fail to respond, it is within the creditor right to get the money you owe him in full, which in some instances may also include the interest that has accrued over time.
Cases where you may file a lawsuit
Before you even file a lawsuit against any person or any business entity, it is very important that you do a background search on the person or the business. Doing this may help you determine whether the person that owes you money will be able to pay you or not. This is because the person may be bankrupt or may lack any material assets to pay you with. It is advisable to do this as it will help you make an informed decision of whether to go ahead with the lawsuit or not.
If the person happens to be bankrupt and does not own any assets that he can sell off to pay you, then you as a creditor might as well say goodbye to your money and right off the debt. This is because when the court demands that the debtor pays you, he or she will have nothing to pay you back with. In this case, the court will just throw away your case and you will probably have to seek other ways of having your debt settled.
If you happen to owe anyone any amount of money, it may be a reasonably good idea to pay it back as soon as possible. Always try to pay off little by little to avoid accumulating huge debts. This will help you avoid lawsuits and having to pay the money back plus all the interest it may have accrued over time. On the other hand, if someone happens to owe you money and does not show the interest or bother of paying it back, it is also a good idea to consider filing a lawsuit. This way, you are likely of getting your money legally through a court order.