To sue someone who owes you money, you send a written demand for payment, confirm the debt is still within the statute of limitations, file a complaint in the court that matches the amount owed, have the defendant formally served with the papers, and prove the debt at a hearing. If you win, the court issues a judgment, and you then use tools like liens, wage garnishment, or bank levies to actually collect. Each step has its own rules, and skipping one can sink an otherwise solid case.
Start With a Demand Letter
Before anything is filed, put your demand in writing. A demand letter tells the debtor that you expect payment by a specific date and that you will sue if they don’t pay. It also shows the judge later that you tried to resolve the matter outside of court, which many small claims courts expect.
The letter should spell out the amount owed, broken down into principal, any agreed interest, and other costs such as bounced-check fees. Reference the contract, invoice, loan agreement, or oral promise behind the debt. Give a firm deadline, usually 10 to 30 days out, and state plainly that you will file suit if the deadline passes.
Send it by certified mail with a return receipt, and keep a copy. If the case ends up in court, that letter becomes part of your evidence.
Check the Statute of Limitations
Every debt has a deadline for suing on it. File after that deadline, and the court will almost certainly dismiss your case even if the debtor plainly owes you money. The clock typically starts the day the debtor missed a payment or broke the agreement.
How long you have depends on the type of debt and the state’s law that applies. Written contracts generally get longer deadlines than oral ones. Across the states, written contracts range from about 3 to 10 years, oral agreements from about 2 to 10 years. Confirm the specific deadline in your state before you spend time and filing fees on a case.
In many states, certain actions by the debtor reset the clock back to zero: a partial payment, a written acknowledgment of the debt, or a new promise to pay. That can help if your deadline is close, but it also means you should track any recent contact or payments so you know exactly where you stand.
Gather Documentation of the Debt
A strong case rests on documents that prove two things: the debt exists, and it hasn’t been paid. Pull together everything that shows the original agreement and the money that changed hands.
- Written contracts or promissory notes, which spell out the terms both parties agreed to.
- Emails, texts, or letters where the debtor acknowledged the debt, discussed repayment, or asked for more time.
- Bank statements or canceled checks showing you actually transferred the money.
- Invoices or receipts documenting goods or services you provided and what was billed.
You also need the debtor’s full legal name and current address. The court uses this to identify the defendant and to make sure the lawsuit papers can be delivered. If you aren’t sure where the debtor lives now, online public records searches or a skip-tracing service can help.
Choose the Right Court
The amount at stake decides where you file. Most debt cases between individuals go to small claims court or general civil court.
Small Claims Court
Small claims court is built for straightforward money disputes. The rules are simplified, lawyers are rarely involved, and cases move much faster. The cap on how much you can sue for runs from $2,500 to $25,000 depending on the state, with most states landing between $5,000 and $10,000. If your claim exceeds the cap, you can file in general civil court instead or trim your claim to fit, though you give up the difference.
General Civil Court
For debts above the small claims limit, you file in your state’s general civil court, sometimes called a district court or superior court. The rules of evidence and procedure are more formal, and cases take longer. Attorneys aren’t required but are more common because the stakes and complexity are higher.
Federal Court
If you and the debtor live in different states and the amount owed is more than $75,000, not counting interest and court costs, you have the option of filing in federal court under diversity jurisdiction.1Office of the Law Revision Counsel. 28 U.S. Code 1332 – Diversity of Citizenship; Amount in Controversy; Costs Federal court is an option in that situation, not a requirement; you can still file in state court.
Filing in the Right Location
Beyond picking the right type of court, you have to file in the right place. The general rule is that you file where the defendant lives. Many states also allow filing where the contract was signed or where the work was supposed to be performed. Filing in the wrong location can get your case dismissed and force you to start over.
File the Complaint
You open the case by submitting a complaint to the court clerk. Small claims courts often call it a Statement of Claim or something similar. The document identifies you as the plaintiff, names the defendant, states the amount owed, and briefly explains why. Be specific: include the date the debt originated, the date payment was due, and a breakdown of principal and any interest.
You can file electronically through the court’s e-filing system or in person at the courthouse. A filing fee is due at submission, typically $30 to $500 depending on the size of the claim and the type of court. The clerk reviews the paperwork, stamps it with a filing date, and assigns a case number that must appear on every later document.
If you can’t afford the filing fee, you can ask the court to waive it. In federal court, this is handled through a formal request under 28 U.S.C. ยง 1915, which lets a person proceed without prepaying fees by submitting a sworn statement showing they can’t pay.2Office of the Law Revision Counsel. 28 USC 1915 – Proceedings In Forma Pauperis Most state courts have a similar process, often tied to a percentage of the federal poverty guidelines. The clerk’s office can supply the form and tell you what you need to qualify.
Serve the Defendant
After filing, you have to formally deliver a copy of the complaint and a court-issued summons to the defendant. This step, called service of process, is a constitutional requirement. The defendant has the right to know they’re being sued and to have a chance to respond. You cannot hand the papers to the defendant yourself.
Common methods include:
- A professional process server, who locates and delivers the papers for a fee that typically runs $50 to $100.
- The local sheriff or marshal, available in many counties for a small fee.
- Certified mail with return receipt, which some courts allow, particularly in small claims cases.
Whoever serves the papers then completes a Proof of Service (or Affidavit of Service) and files it with the court. Without valid proof of service on file, the judge cannot move forward or enter any order against the debtor.
What the Defendant Can Do Next
Once served, the defendant has a limited window to file a written response, called an Answer. In federal court, that window is 21 days after service.3Legal Information Institute (LII) at Cornell Law School. Federal Rules of Civil Procedure Rule 12 – Defenses and Objections: When and How Presented State court deadlines vary, usually between 20 and 30 days. Small claims courts tend to set shorter deadlines and simpler response procedures.
If the defendant doesn’t respond at all, you can ask for a default judgment, which means winning because the other side failed to show up. The court may grant the full amount you claimed, though a judge sometimes holds a brief hearing to verify the amount before entering the judgment.4Legal Information Institute (LII) at Cornell Law School. Federal Rules of Civil Procedure Rule 55 – Default; Default Judgment
Filing suit also opens the door to a counterclaim. If the defendant believes you owe them money arising from the same transaction, such as a product you promised but didn’t deliver, they can file their own claim inside the same case. A counterclaim can exceed your original claim, which means you could end up owing money instead of collecting it. Before you file, honestly assess whether the debtor has any legitimate grievance that could come back at you.
If the defendant does file an Answer, the court schedules a hearing or trial. Your job there is to prove that the debt exists, that the amount is correct, and that it hasn’t been paid. Win, and the court enters a judgment stating the exact amount the defendant owes. The judgment may include your original claim, accrued interest, and court costs.
Collecting on the Judgment
Winning a judgment doesn’t put money in your pocket. If the debtor won’t pay voluntarily, you have to use the court’s enforcement tools. This is often the hardest and slowest part of the process.
Judgment Liens
You can place a lien on the debtor’s real estate by filing a certified copy of the judgment with the appropriate recording office. A lien doesn’t give you the property, but it stops the debtor from selling or refinancing without paying you first.5Office of the Law Revision Counsel. 28 USC 3201 – Judgment Liens This works well as a long-term strategy when the debtor owns property but claims no cash.
Wage Garnishment
Wage garnishment directs the debtor’s employer to withhold part of each paycheck and send it to you. Federal law caps garnishment for ordinary debts at the lesser of 25 percent of the debtor’s disposable earnings or the amount by which their weekly earnings exceed 30 times the federal minimum wage.6Office of the Law Revision Counsel. 15 U.S. Code 1673 – Restriction on Garnishment Some states cap it lower. You need a separate court order after your judgment is entered to start the garnishment.
Bank Levies
A bank levy lets you seize funds directly from the debtor’s bank account. Like wage garnishment, it requires a court order. The court directs the bank to freeze the account and turn over funds up to the judgment amount. Certain funds, such as Social Security benefits and other government payments, are often exempt.
If the Debtor Files Bankruptcy
If the debtor files for bankruptcy at any point, before, during, or after your lawsuit, a federal protection called the automatic stay immediately halts all collection activity. You cannot continue the lawsuit, garnish wages, levy bank accounts, or even contact the debtor about the debt while the stay is in effect.7Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
The stay stays in place until the bankruptcy case is closed, dismissed, or the debtor receives a discharge. If the debt is discharged, the debtor’s obligation to pay is permanently wiped out, and you can’t collect regardless of any judgment you hold. Certain debts, such as those obtained through fraud, may survive bankruptcy, but proving an exception requires a separate proceeding inside the bankruptcy case. If you learn the debtor has filed, talk to an attorney before you do anything else, because violating the automatic stay can bring penalties against you.