When your business operates nationally, your unpaid accounts probably do too. At first glance, debt collection may seem straightforward — if someone owes you money, you pursue it. But when that debtor is located in another state, everything changes.
At Frisella Law Firm, we understand that multi-state debt collection involves far more than sending a demand letter. Jurisdiction, court procedures and enforcement laws may vary significantly across state lines. If not handled properly, these differences can jeopardize your case and delay recovery – sometimes indefinitely.
Jurisdiction Matters:
1. Jurisdiction: Where You File Can Determine Success
One of the first questions in any collection case is:
Where should the lawsuit be filed?
Many contracts include a forum selection clause, specifying which state’s courts will handle disputes. However, the forum selection clause is only one consideration. Jurisdictional considerations also include:
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where the contract was signed,
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where the services were performed,
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your debtor’s headquarters, and
- where you will find the debtor’s assets.
Filing in the wrong jurisdiction can result in wasted filing fees and wasted time. An experienced collection attorney knows how to analyzes these issues before litigation begins to ensure your most strategic jurisdiction which means less expensive suit fees and faster recovery. Without working with a National Debt Collection Law Firm (like Frisella Law Firm) you will be left to decide where to file and which law firm to hire on your own.
2. State Laws Vary
Each state has its own laws governing:
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Statutes of Limitation (see previous blog for SOL details)
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Interest rates on unpaid balances
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Attorney fee recovery provisions
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Service of process requirements
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Post-judgment enforcement remedies
Additionally, some states are much more favorable to creditors when it comes to wage garnishments, bank levies, and asset attachments, while others provide stronger debtor protections.
At Frisella Law Firm we have the experience to know the jurisdictional differences and how they may effect the outcome of your B2B collection matter. Contact us today for more information!
3. Enforcing a Judgment Across State Lines
Winning a lawsuit is only part of the battle. Collecting on a judgment (which is when you get paid) often requires enforcement in the state where the debtor’s assets are located.
If you obtain a judgment in Massachusetts but the debtor’s bank accounts are in Texas, you may be required to domesticate the judgment in Texas before pursuing collection remedies there.
This process involves:
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Filing certified copies of the judgment
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Complying with the Uniform Enforcement of Foreign Judgments Act (where applicable)
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Following local court procedures
Without proper handling, you may win your lawsuit but never get paid because post judgement remedies and enforcement efforts can stall your recovery indefinitely.
4. Local Counsel Requirements
Many states require that litigation be handled by an attorney licensed in that jurisdiction. This means your law firm must either:
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Be admitted in that state, or
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Work with trusted local counsel
Don’t waste time hiring different law firms in multiple states, managing separate invoices, and repeating the same case details over and over. Frisella Law Firm has spent over two decades creating a national network of collection attorneys and streamlining the process allowing us to manage your case from intake through judgment and enforcement, while coordinating local representation where necessary. Contact us today for more information!