Yes, you can sue someone who owes you money. A court can issue a judgment ordering the debtor to pay, and the legal system gives you tools like wage garnishment and bank levies to enforce it if they don’t. But winning and collecting are two different things. Before you file, confirm your claim is still within the legal deadline, send a written demand, and take an honest look at whether the debtor has income or assets worth chasing.
Check the Deadline Before You Do Anything Else
Every state sets a cutoff for how long you have to file a lawsuit over an unpaid debt. Once that window closes, the debtor can ask the court to dismiss the case no matter how solid your evidence is. For written contracts, the deadline runs anywhere from three to fifteen years depending on the state. For oral agreements, it’s shorter, typically three to ten years. The clock generally starts on the date the debtor missed a payment or otherwise failed to hold up their end.
Some actions can pause or reset that clock. In many states, if the debtor makes a partial payment or acknowledges the debt in writing, the limitations period starts over from that date. Moving out of state can also pause the countdown in some places. Because the rules vary so much, checking your state’s specific deadline is the single most important thing to do first. A valid debt becomes uncollectible in court the moment the statute of limitations runs out.
Send a Demand Letter First
Before filing anything, send the debtor a written demand letter. Some courts expect to see that you made a good-faith effort to resolve the dispute, and a few jurisdictions require it. Even where it isn’t mandatory, a demand letter often produces payment without the expense of a lawsuit.
A good demand letter states the total amount owed, including any agreed interest or late fees, sets a clear deadline for payment (usually 15 to 30 days), and says you’ll file suit if the debt isn’t paid by that date. Send it by certified mail with a return receipt so you have proof it was delivered. Keep the letter and the receipt. If the case ends up in court, those documents show the judge you tried to work it out first.
Is the Debtor Worth Suing?
Winning a lawsuit doesn’t guarantee you’ll see a dollar. If the debtor has no job, no savings, and no valuable property, they’re what courts call “judgment proof.” There’s nothing for you to seize, even with a court order in hand. Filing fees, service costs, and time add up, so sizing up the debtor’s finances before you file can save you from paying for a judgment you can’t enforce.
Federal law shields certain income from garnishment entirely. Social Security benefits, Supplemental Security Income, veterans’ benefits, federal student aid, and several other government payments cannot be taken to satisfy a private debt judgment.1Consumer Financial Protection Bureau. Can a Debt Collector Take My Federal Benefits If those protected payments are the debtor’s only income and they own no significant property, a lawsuit will likely produce a judgment that just sits there. Judgments do stay valid for years and can usually be renewed, so if the debtor’s finances improve later, you may still be able to collect. That’s a long bet.
What You Need to Prove
Most debt lawsuits rest on a broken agreement between two people. A legally enforceable agreement exists when one person makes an offer, the other accepts, and both sides exchange something of value. When you lend money, the cash is your side of the exchange; the borrower’s promise to repay is theirs. If the borrower refuses to pay, they’ve broken the agreement, and that breach is your ground to sue.
Written agreements provide the clearest evidence: signed loan documents, promissory notes, or even detailed text messages spelling out the repayment terms. Verbal agreements are also enforceable in most places, but the terms are harder to prove because it comes down to each person’s account of what was said. Bank transfers, partial payments the debtor already made, or messages where the debtor acknowledged the debt can help establish both that an oral agreement existed and what it required.
Which Court to File In
The amount at stake decides which court hears your case. Small claims courts handle lower-value disputes and are designed so you can represent yourself without a lawyer. The dollar limit varies significantly by state, ranging from $2,500 on the low end to $25,000 on the high end. Filing fees in small claims are modest, and the process moves faster than in higher courts.
If the debt is above your state’s small claims limit, you’ll need to file in a general civil court, often called a district court or superior court depending on where you live. These courts handle larger and more complex cases, charge higher filing fees, and follow more formal procedures where a lawyer is strongly advisable. Check your local court’s website or call the clerk to find the exact threshold in your area.
Filing the Case
Before you file, you need the debtor’s full legal name and a current address. Calculate the exact amount owed, including any interest or late fees spelled out in your original agreement. Gather everything that supports your claim: signed contracts, promissory notes, unpaid invoices, bank statements showing the money transfer, and any emails, texts, or letters where the debtor acknowledged the debt or discussed repayment.
To start the lawsuit, get a complaint form (sometimes called a statement of claim in small claims court) from the court clerk or the court’s website. The form asks you to identify the parties, explain why the debtor owes you money, and state the exact dollar amount you want. Be precise. Courts generally won’t award more than what you ask for in your filing. Submit the completed form to the clerk with the filing fee. Fees range from around $15 in some small claims courts to several hundred dollars in general civil courts.
Serving the Debtor and What Happens Next
After you file, the debtor has to be formally notified through a process called service. You can’t just hand the papers over yourself. Instead, you typically hire a professional process server or arrange for the local sheriff’s office to deliver the summons and complaint. Some courts also allow service by certified mail with a return receipt. You then file proof of service with the court to confirm delivery.
Once served, the defendant has a limited window to respond. Under the federal rules, that window is 21 days.2Cornell Law School. Federal Rules of Civil Procedure Rule 12 – Defenses and Objections State courts set their own deadlines, commonly 20 to 30 days. If the defendant doesn’t respond in time, you can ask the court for a default judgment, essentially winning because the other side failed to show up.3Cornell Law School. Federal Rules of Civil Procedure Rule 55 – Default Judgment The court may still hold a brief hearing to verify the amount owed before entering default.
If the defendant does respond, the case moves toward a hearing or trial. Many courts, especially small claims courts, offer or even require mediation first. A neutral third party helps both sides try to reach a settlement. If mediation fails or isn’t available, the case goes before a judge who hears both sides and rules.
Collecting After You Win
A judgment in your favor confirms the debt is legally owed, but it doesn’t hand you the money. If the debtor won’t pay voluntarily, you’ll need to use the court’s enforcement tools. Each one requires separate filings and sometimes additional fees, but together they give you legal authority to reach the debtor’s income and property.
Wage Garnishment
Wage garnishment directs the debtor’s employer to withhold part of each paycheck and send it to you. Federal law caps the garnishment at the lesser of 25 percent of the debtor’s disposable earnings or the amount by which their weekly disposable earnings exceed 30 times the federal minimum wage, which at $7.25 per hour protects $217.50 per week.4Office of the Law Revision Counsel. United States Code Title 15 Section 1673 – Restriction on Garnishment5U.S. Department of Labor. State Minimum Wage Laws Because the cap uses the smaller of the two figures, low-wage earners keep more of their pay.
Bank Account Levy
A bank levy lets you seize money directly from the debtor’s checking or savings account. You file a request with the court, and once granted, a law enforcement officer delivers the order to the debtor’s bank. The bank freezes and turns over available funds up to the judgment amount. If the account holds direct-deposited federal benefits like Social Security, the bank must protect at least two months’ worth of those deposits from the levy.1Consumer Financial Protection Bureau. Can a Debt Collector Take My Federal Benefits
Property Lien
For larger debts, you can place a lien on the debtor’s real estate by filing an abstract of judgment with the county recorder’s office in the county where the debtor owns property. The lien attaches to the property and has to be paid off before the debtor can sell or refinance. If the debtor owns property in multiple counties, file a separate abstract in each. Recording fees are generally modest, usually between $10 and $80.
Debtor’s Examination
If you don’t know what the debtor owns or where they bank, you can ask the court to order the debtor to appear for an examination under oath. You can ask about income, bank accounts, investments, and property, and you can request that the debtor bring documents like bank statements and tax returns. If they fail to appear after being properly notified, the court can hold them in contempt.6Cornell Law School. Federal Rules of Civil Procedure Rule 69 – Execution
Post-Judgment Interest
A judgment typically accrues interest from the date it’s entered until it’s paid in full.7Office of the Law Revision Counsel. United States Code Title 28 Section 1961 – Interest State courts set their own post-judgment interest rates, which vary. Interest compensates you for the delay and gives the debtor a financial reason to pay sooner rather than later.
If the Debtor Files Bankruptcy
A bankruptcy filing triggers an automatic stay that immediately halts all collection activity, including lawsuits, wage garnishments, bank levies, and even phone calls demanding payment.8Office of the Law Revision Counsel. United States Code Title 11 Section 362 – Automatic Stay The stay kicks in the moment the petition is filed, and violating it can carry penalties. Any pending lawsuit or active garnishment stops until the bankruptcy court decides what happens next.
In many cases the debtor’s obligation to pay your judgment may be wiped out by a bankruptcy discharge. Some debts survive, though. Debts obtained through fraud, money owed for intentional injury, and obligations the debtor failed to list in the bankruptcy filing are among those that cannot be discharged.9Office of the Law Revision Counsel. United States Code Title 11 Section 523 – Exceptions to Discharge If your debt falls into one of those categories, you may be able to keep pursuing collection after the bankruptcy case wraps up, but you’ll likely need to file a motion with the bankruptcy court to establish that your debt qualifies for the exception.