Court-Based Remedies

Sometimes, a creditor will initiate court proceedings in order to collect on a debt.  In cases involving emergencies, the creditor may be able to seize the debtor's property even before the court decides the matter.  These are extraordinary measures, however, and should be employed only when other methods would be futile or useless, such as when perishable goods are involved, or when the collateral, if left in the debtor's control, would rapidly decline in value.

Two of the more common pre-judgment remedies are replevin and attachment, which is similar to garnishment.  In a replevin action, a creditor that holds title to property that is the subject of a debt may take that property back if the debt is not repaid.  A lessor of furniture, for example, may be able to take back its property if the lease payments are not made, but often notice and hearing requirements must be met before that can happen.  These requirements may be waived if the property is in imminent danger of destruction, or under other exceptional circumstances.  Ordinarily, the county sheriff must execute the order of replevin, seize the property, and deliver it to the creditor.

Attachment is a procedure set forth in state statutes, and the particular details vary from state to state.  In an attachment proceeding there is usually a court hearing, after which the court issues an order authorizing the creditor to take the debtor's property or title to the property.  Like replevin, attachment is available in only extraordinary cases, such as when the debtor is about to dispose of the property.

Lawsuits and Liens

If all of the remedies described above fail, the creditor can sue to collect the debt.  The creditor will be entitled to an enforceable judgment if it proves its case or if the debtor fails to contest the claim.  Once a judgment is obtained, the creditor can enforce the judgment by claiming enough of the debtor's property to cover the debt, usually with the assistance of the local sheriff.  The sheriff may actually take the property, or will record the creditor's lien against the property, such as when real estate is involved.  The sheriff can arrange for a sale of the property, the proceeds of which are used to satisfy the debt.  Often, more than one creditor is involved and they will be paid in a particular order of priority, which is usually based on the order in which the creditors established their legal claims to the property.