Legal Question in Credit and Debt Law in Washington
collecting on a personal loan
My mother made a large personal loan. She drew up a signed contract & used a check as a money trail. The debt is now 6 months over due. She has offered to rewrite the contract for small affordable payments, but to no avail. Instead, the debtor wants to rewrite the contract stipulating that she would get her money after the sale of a piece of property. Since she has been given no proof that the property actually belongs to the debtor & the housing market has been declining, she refused the debtor's suggestion.
I am now being offered 50% of the contracts worth to take over the task of collecting for her.
Does the contract need to be transferred to my name in order for me to take steps in the judgement & collection processes? And what are my best options for beginning these processes? If a judgement is made in our favor can we obtain leins against the debtor's personal property?
1 Answer from Attorneys
Re: collecting on a personal loan
Your mother can assign the debt to you. You would become a third party collector, and subject to the Federal Fair Debt Collection Practices Act, so you'll want to brush up on those laws and the Washington Statutes regarding debt collection.
You can't act as your mother's attorney, though. A collection attorney can recover the money and if the contract awards attorney fees, they can collect that from the debtor as well.
A judgment essentially operates as a lien on real property, getting a lien after you have a judgment is not appropriate.
Know that civil litigation takes a long time, even with a lawyer. If the debtor is threatening to sell property right now, there are other mechanisms you can use to secure the property and make them pay the debt.
Hope this helps. Elizabeth Powell
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