Scoring a judgment 

The holy grail prize for any debt collector is securing a court judgment against a delinquent debtor. An ironclad judgment allows the collector to explore aggressive methods for compelling payment that aren’t normally permissible. This could include garnishing wages directly from paychecks, putting liens on property, even having liens placed on future legal winnings or settlements a debtor may receive. 

Applying legal pressure 

Even if an actual judgment never gets rendered, the mere threat of being taken to court can be enough to strike fear in the hearts of some consumers. Collectors know that being named as a defendant in a lawsuit lights a fire unlike other collection tactics. For many people, finally getting served with an official court summons is that wake-up call to get serious about resolving what they owe. 

Restarting the clock 

In many states, debt collectors face a time limit called the statute of limitations for how long they can legally pursue certain unpaid debts through the courts. Filing a new lawsuit on old debt can effectively “re-age” it and restart that legal time window for being able to eventually score a judgment. 

Stacking the fees 

On top of whatever original debt amount is owed, the collector can potentially push to have all their legal fees, court costs, and processing charges tacked onto the total balance if they secure a court award. Those rapidly compounding costs raise the stakes for the debtor to settle outside of court. 

Does the type of debt matter? 

So which debts are most likely to land debtors on the court’s docket? Major outstanding credit card balances are easily among the most commonly pursued debts through litigation. Unpaid medical bills, utility payments, personal loans and auto deficiencies are other frequent candidates to go before a judge. 

But here’s where debtors need to be on high alert – virtually no debt is legally untouchable as fair game for a collector to take to court. Even old, expired debts you thought were outside the statute of limitations could potentially be revived if mishandled. Ditto goes for amounts you may assume are too paltry to be worth the legal costs – tell that to collectors salivating over the prospect of netting post-judgment interest for years to come on unpaid balances. 

Bottom line

When debt collectors start mentioning court, it’s a threat no consumer should outright dismiss without carefully considering how much legal liability could be at stake. While lawsuits may not get filed at the first sign of a payment being missed, rest assured it’s very much an arrow in a debt collector’s quiver of tactics for eventually getting what they want – your money.