When large institutions like banks are owed money, they can transfer responsibility for collecting to other companies, or sell them the debt outright. Large enough institutions count their "accounts receivable" (money owed to them) as an asset itself; these accounts can form a substantial portion of these companies' assets. (This form of accounting is arguably unstable, and responsible for serious damage to the global economy.) Individuals or small businesses that are owed money rarely have this luxury. But there are steps you can take to collect on money that you are owed. The first questions a creditor must ask when considering legal action to collect a debt are, first, how large is the debt? And, compared to that, what assets does the debtor likely hold? If the debt is too small, or the debtor is too poor to pay them, it is likely not worth pursuing at all, from a strictly economic perspective. If the cost of a collections action would be higher than the probability of recovering anything, it may be best just to let the matter lie. The size of the debt also will determine in what court an action must be taken. Debts below a certain threshold are handled in Small Claims courts in Oregon, while larger claims are handled in Circuit Court. In Small Claims court, procedures are simpler and cases are streamlined. Litigants are generally not allowed to have lawyers speak for them in Small Claims court, though you can still ask a lawyer to advise and prepare you outside of the courtroom. In order to collect on a debt, you must prove that a valid contract or other basis for relief existed. This is easiest if all contracts were documented in writing; but valid contracts can be formed on a verbal basis alone, if that contract can be shown by the actions of the parties. You may also have a claim if someone has converted -- unlawfully taken or destroyed -- your property. If you can demonstrate such a cause of action, you may be able to sue and win a judgment and money award from your Circuit Court. Ideally, a debtor will then pay the debt; but the law makes remedies available against debtors who refuse to pay. With a valid money award, you can seek garnishment of a debtor's assets, including paychecks and bank accounts. You must have specific information about their employer or banking institutions to do this. If you do not know this information, you can have the debtor served and compel them to appear for a debtor examination. This is similar to a deposition: it is an interview, under oath and before a court or a court reporter, where the debtor must answer questions about their assets. You can use this information to attach those assets and get repaid for your debt. While you are pursuing a debtor, you may be bound by Federal and state laws governing the practice of debt collections. You must not threaten the debtor with any action that you cannot legally take, or contact them in a harassing manner. Such behavior could expose you to liability for unlawful debt collections practices. The legal requirements for these procedures can be complicated. If you have any questions, you should consult with an attorney. Contact information: Jay Bodzin, Attorney at Law - 2075 SW First Avenue, Suite 2J, Portland, OR, 97201 Telephone: 503-227-0965 | Fax: 503-345-0926 | Email: jay@northwestlawoffice.com Note: Nothing on this page is intended to create an attorney-client relationship or to constitute legal advice for any situation. Every case is unique. If you have any questions, you should consult with an attorney.