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COLORADO SPRINGS TRIAL LAWYER
experienced and professional attorney - 30+ years
private practice in Colorado state and
municipal courts |
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ROBERT D. GUSTAFSON |
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ATTORNEY AT LAW
6538 Charter
Drive
Colorado Springs, CO 80918-1335 |
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Phone (719)
260-1002
Fax (719) 260-1003 *
Toll Free (800) 410-1002 |
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Colorado Debt Collection - debtor
skip tracing, asset trace, overshadowing, co-maker notices, right to cure, Fair Debt
Collection Practices Act, creditor misconduct, validation of debt,
overshadowing, litigation, collection lawsuit, promissory note, written
contract, oral contract, quasi contract, quantum meruit, unjust enrichment,
filing fees & costs, jurisdictional limits, venue, default judgment,
stipulation in lieu of judgment, confession of judgment, trial, judgment,
summary judgment, garnishment & garnishment limitations, levy, execution,
exempt property, foreign judgment registration, insufficient funds checks, NSF
checks, closed account, returned check charge, treble damages, check fraud
criminal charges, replevin, liens & lien foreclosure, repossession, sale
& deficiency balance, lien for labor, garagemen’s lien, tailor’s lien,
laundry lien, dry cleaning shop lien, self service storage facilities lien,
materialmen's lien, mechanic's lien, agistor's lien
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Most debts are collectible, some are not.
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If the debtor is a
skip,
he / she must be located to proceed. Some debtors skip
with frequency, even after process service.
a. Skip would preclude income or bank garnishment.
b. If the debtor remains in
the same county, transcript of judgment filed with the Clerk &
Recorder's Office creates a lien, satisfaction of which would be required by
new potential creditors before making a secured loan upon real property or
motor vehicles.
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If the debtor resides or moves
out of state, under the Uniform Judgment Act, the Colorado judgment may be
registered in the foreign state and enforced in debtor's local area.
Same applies to registering a foreign judgment in Colorado. Years ago
when I lived on the western slope, the Uniform Judgment Act worked quite
well against California hunters who trashed hunting lodges and thought they
were immune due to the distance.
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Some debtors simply have no
verifiable income or non-exempt assets.
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If the debtor files bankruptcy,
an automatic stay enters immediately which stops all collection
activity. The debt is then uncollectible unless the creditor is
secured and receives relief from stay to take possession of the collateral,
or perhaps 1.) the debtor committed a preference or 2.) the bankruptcy
is thrown out on the basis of fraud upon the creditors or prior discharge
within the proscribed time limits. These circumstances are
unlikely. Unsecured creditors should plan on a write-off in the event
of bankruptcy.
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While considering legal action
referral, creditors should review the account receivable probability of
satisfaction.
a. If a creditor can answer
affirmatively to the below four questions, legal referral is probably
worthwhile. If not, the receivable may be a bad debt
charge-off.
1. Is the underlying claim meritorious, rendering judgment likely?
2. Has the creditor avoided unfair debt collection practices, thereby
avoiding a legitimate counter-claim?
3. Is there a probability income or assets can be located to satisfy
judgment?
4. If the amount in controversy sufficient to justify the attorney fee
and litigation cost expense?
b. It is an unwise business
decision to throw good money after bad. That applies whether fees are
billed upon an hourly basis or a contingency basis. Costs will be
incurred either way.
c. Although any individual
case may test an attorney's capabilities, collections are a business - not an
esoteric test of skill. If it appears from the outset that the account
is uncollectible, I will quote hourly fees, not contingency fees.
Refer to subparagraphs (a) and (b) above.
d. Major credit companies
budget bad debt just as they budget office rent, salaries or other
expenses. That doesn't mean they carelessly write-off any individual
account receivable. New businesses may learn the hard way that
improper extension of credit may deplete profit or perhaps cause failure of
the business. It is my intent to educate prospective clients to make
wise decisions regarding legal action referral. Pick your battles and
cut losses with economic acumen.
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There are delays inherent in collection lawsuits.
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The whereabouts of the debtor
must be known before collection effort or lawsuit may be commenced.
Skip
tracing causes delay and expense.
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Prior to collection referral,
each debtor must be provided a notice to cure. Ten (10)
day delay before the notice may be sent + twenty (20) day delay for period
to cure = thirty (30) day minimum delay.
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At commencement of collection
efforts, each debtor must be provided a validation letter. Thirty (30)
day delay. Debtors residing out of state require research into their
homestate fair debt collection practice validation law.
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Once the lawsuit has been filed
and served, a period of time elapses before first appearance - sixty (60)
day delay. If the debtor requests trial, litigation will take some
time. Counsel will move the case to final orders hearing as quickly as
possible, but court dockets are crowded.
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Once judgment has been obtained,
assets must be located against which garnishment, execution or levy may be
made.
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Sometimes the creditor is not in possession
of a promissory note but can obtain debtor's
execution on a note to evidence validity of the debt. If a debtor is willing to execute a
note, I advise clients to delay legal
referral, obtain an executed promissory note upon terms the debtor can
realistically honor, then allow the debtor opportunity to make timely
payments or default on the note. A promissory note will simplify the
creditor's collection litigation.
Clients may refer to the link to obtain a form
promissory
note. Co-makers would require additional
documents - consult the attorney.
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I
know creditors may likely be frustrated with a debtor before considering litigation
referral. I am aware money loan, goods or services or were provided to the
debtor and payment is past due. I understand creditors want their money
yesterday.
I am a one horse attorney. Clients receive my personal, professional
attention, and I will not accept a lawsuit if I have insufficient time to timely
pursue the case. It is my standard procedure to open file and commence
collection activity within two weeks of receipt of the case, sooner if
possible. I provide scheduled periodic status reports. If a case
hits a brick wall, either because the debtor can not be located or if, after use
of judicial remedies, assets can not be found to satisfy judgment, the client
will be notified. If the client can not provide assistance or does not
authorize use of an investigator, I close file and refer the case back to
the client. I am tenacious, but this is a business transaction -
particularly if the case was accepted upon a contingency fee. There must
be a reasonable likelihood of judgment satisfaction to justify continued
effort. Also, I request that any prospective client exercise patience
within reasonable time limits, or not retain my office. No attorney can
devote his / her time exclusively to one particular case. These common
sense notions apply to every attorney - client relationship.
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A client may save expense by verification of the debtor's current contact
information before referring the matter to the attorney for debt
collection litigation proceedings. If self help fails or is
insufficient, attorney accessible search databases are available. Skip tracing or asset search may
be conducted by:
1.
attorney skip tracing
/ asset search or
2. commercial (pay) search
order from a service provider or
3. if the debtor is particularly
difficult to locate, a
private
investigator may be required
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A notice to cure
should have been sent by the creditor client to the debtor before referral of the debt to counsel for
litigation.
1. Although the statute simply provides for mailing,
to maximize chance of receipt and to evidence the fact the letter
was indeed sent, I prefer that the client send the notice to cure both regular U.S. mail, and
by certified mail with a notation on the letter to that effect, containing the
certified mail number. I ask that a copy of the notice to cure, letter,
USPS certified mail payment receipt and USPS
green receipt card be included in the collection referral.
2.
Although CRS 5-5-111(5) provides the law does not apply to
consumer credit transactions that are payable in four or fewer installments, if
there is any issue regarding qualification I
prefer a cautious approach and provide notice to avoid
potential defense claim.
3. The
notice of right to cure is required only once every twelve (12) months. CRS
5-5-111(2)
CRS 5-5-110. Notice of right to cure.
(1) With respect to a consumer credit
transaction, after a consumer has been in default for ten days for failure to
make a required payment and has not voluntarily surrendered possession of goods
or the mobile home that are collateral, a creditor may give the consumer the
notice described in this section. A creditor gives notice to the consumer
pursuant to this section when the creditor delivers the notice to the consumer
or mails the notice to the consumer at the consumer's residence, as defined in
CRS 5-1-201(6).
(2) Except as provided in subsection
(3) of this section, the notice shall be in writing and conspicuously state: the
name, address, and telephone number of the creditor to which payment is to be
made, a brief identification of the credit transaction, the right to cure the
default, and the amount of payment and date by which payment must be made to
cure the default. A notice in substantially the following form complies with
this subsection (2):
Name, address, and telephone number of creditor
Account number, if any
Brief identification of credit transaction
Date is the LAST DATE FOR PAYMENT (20 days minimum - see
CRS 5-5-111 below)
Amount is the AMOUNT NOW DUE
You are late in making your payment(s). If you pay the AMOUNT NOW DUE
(above) by the LAST DAY FOR PAYMENT (above), you may continue with the
contract as though you were not late. If you do not pay by this date, we may
exercise our rights under the law.
If you are late again in making your payments, we may exercise our rights
without sending you another notice like this one. If you have questions, write
or telephone the creditor promptly.
(3) If the consumer credit
transaction is a consumer insurance premium loan, the notice shall conform to
the requirements of subsection (2) of this section, and a notice in
substantially the form specified in subsection (2) of this section shall be
deemed compliance with this subsection (3) except for the following:
(a) In lieu of a brief identification of the credit transaction, the notice
shall identify the transaction as a consumer insurance premium loan and shall
identify each policy or contract that may be canceled;
(b) In lieu of the statement in the form of notice specified in subsection (2)
of this section that the creditor may exercise its rights under law, a statement
shall be included that each policy or contract identified in the notice may be
canceled; and
(c) The last paragraph of the form of notice specified in subsection (2) of this
section shall be omitted.
(4) A notice of right to cure
delivered or mailed to a cosigner pursuant to this section shall be modified to
state that the consumer is late in making his or her payment, include the
consumer's name, and that if the amount now due is not paid by the last date for
payment, the creditor may exercise its rights against the consumer, cosigner, or
both.
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CRS 5-5-111. Cure of default.
(1) With respect to a consumer credit
transaction, except as provided in subsection (2) of this section, after a
default consisting only of the consumer's failure to make a required payment, a
creditor, because of that default, may neither accelerate maturity of the unpaid
balance of the obligation nor take possession of or otherwise enforce a security
interest in the goods or the mobile home that are collateral until twenty days
after giving the consumer a notice of right to cure described in CRS
5-5-110. Until the expiration of the minimum applicable period after the notice
is given, all defaults consisting of a failure to make the required payment may
be cured by tendering to the creditor the amount of all unpaid sums due at the
time of the tender, without acceleration, plus any unpaid delinquency or
deferral charges. Cure restores the consumer to his or her rights under the
agreement as though the defaults had not occurred.
(2) With respect to defaults on the
same obligation, other than defaults on an obligation secured by a mobile home,
after a creditor has once given the consumer a notice of right to cure described
in CRS 5-5-110, this section gives no right to cure and imposes no
limitation on the creditor's right to proceed against the consumer or goods that
are collateral with respect to any subsequent default that occurs within twelve
months of such notice. With respect to defaults on the same obligation that is
secured by a mobile home, this section gives no right to cure and imposes no
limitation on the creditor's right to proceed against the consumer or goods that
are collateral with respect to any third default that occurs within twelve
months of such notice. For the purpose of this section, in connection with
revolving credit accounts, the obligation is the consumer's account, and there
is no right to cure and no limitation on the creditor's rights with respect to
any default that occurs within twelve months after an earlier default as to
which a creditor has given the consumer notice of right to cure.
(3) Unless a creditor has provided
the co-signor on a consumer credit transaction with a notice of right to cure
that complies with CRS 5-5-110 and this section, in addition to the notice
of right to cure provided to the consumer, the creditor may neither accelerate
maturity of the unpaid balance of the obligation as to the co-signor nor report
that amount on the co-signor's consumer report with a consumer reporting agency
as defined in CRS 12-14.3-102, and 15 U.S.C. § 1681a.
(4) This section and the provisions
on waiver, agreements to forego rights, and settlement of claims do not prohibit
a consumer from voluntarily surrendering possession of goods that are collateral
and the creditor from thereafter enforcing its security interest in the goods at
any time after default.
(5) This section shall not apply to
consumer credit transactions that are payable in four or fewer installments.
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CRS 5-3-105. Notice to cosigners and similar parties.
(1) No natural person, other than the
spouse of the consumer, shall be obligated as a cosigner, co-maker, guarantor,
endorser, surety, or similar party with respect to a consumer credit
transaction, unless before or contemporaneously with signing any agreement of
obligation or any writing setting forth the terms of the consumer's agreement,
the person receives a written notice that contains a completed identification of
the debt he or she may have to pay and reasonably informs such person of his or
her obligation with respect to it. Such written notice may be set forth in the
consumer's agreement of obligation or in a separate writing. For purposes of
this section, the word "co-signer", "co-maker",
"guarantor", "endorser", or "surety" means a
natural person who, by agreement and without compensation, renders himself or
herself liable for the obligation of another in a consumer credit transaction,
and the terms "agreement" and "consumer's agreement" mean
the original underlying agreement.
(2) The notice required by this
section must be clear and conspicuous notice and comply with the disclosure
requirements of 16 C.F.R. § 444.3, 12 C.F.R. § 227.14, or 12 C.F.R. § 535.3.
(3) The notice required by this
section need not be given to a seller, lessor, or lender who is obligated to an
assignee of his or her rights.
(4) A person entitled to notice
pursuant to this section shall also be given a copy of any writing setting forth
the terms of the consumer's agreement and of any separate agreement of
obligation signed by the person entitled to the notice.
(5) A co-signor is entitled to a
notice of right to cure pursuant to sections CRS §§ 5-5-110(4) and 5-5-111(3).
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Debt collection is governed by the Fair
Debt Collection Practices Act 15 USC §§ 1692 - 1692o (FDCPA) and under
the Colorado Fair Debt Collection Practices Act CRS §§ 12-14-101 - 12-14-137 (CFDCPA). |
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Communications will not be made with third
persons other than the debtor, except permitted location inquiries.
Counsel will not harass the debtor by initiation of
unreasonably repetitive communications or communications at inconvenient times,
or other prohibited conduct. Once the matter has been referred for litigation, I ask that my
clients discontinue all further communications with the debtor. Simply
put, in that fashion a client can not open mouth and insert foot. This
closes the door to a claim for actual and punitive damages plus debtor's costs and
attorney's fees. See CRS 5-5-109
Prospective clients must understand that I am an attorney with the
goal of procuring judgment and satisfaction thereof, not pursuit of any
vendetta.
If the client or any employee or agent of the client has engaged in
unconscionable conduct in attempt to collect the debt prior to referral, please
notify the attorney at the time the account receivable is referred. It may
be prudent to charge off and thus possibly avoid penalties. See
Ethics Warning
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When retained, this office will provide each debtor with a notice under the FDCPA and CFDCPA. This notice is known as a validation letter, and will
briefly
delay commencement of any lawsuit. To minimize delay, verification of the
debt (documentary evidence) and creditor identification will be included with
the validation of debt notice. To maximize chance of receipt and to evidence the fact the letter
was indeed sent, the validation letter will be sent both regular U.S. mail, and
by certified mail.
FDCPA 15 USC 1692g (paraphrased)
a. Within five (5) days after the initial communication with a consume in
connection with the collection of any debt, unless the following information is
contained in the initial communication or the consumer has paid the debt, a debt
collector shall send the consume a written notice contain the following
information.
1. The amount of the debt.
2. The name of the creditor to whom the debt is owed.
3. A statement that unless the consume, within thirty (30) days after
receipt of the notice, disputes the validity of the debt, or any portion
thereof, the debt will be assumed to be valid by the debt collector.
4. A statement that if the consumer notifies the debt collector in writing within
the thirty (30) day period that the debt or any portion thereof, is
disputed, the debt collector will obtain verification of the debt or a copy of
a judgment will be mailed to the consumer by the debt collector, and
5. A statement that, upon the consumer’s written request within the
thirty (30) day period, the debt collector will provide the consumer with
the name and address of the original creditor, if different from the current
creditor.
6. If the consumer notifies the debt collector in writing within the
thirty (30) day period described in subsection (a) that the debt, or
any portion thereof, is disputed, or that the consumer requests the name
and address of the original creditor, the debt collector shall cease
collection of the debt, or any disputed portion thereof, until the debt
collectors obtains verification of the debt or a copy of the judgment, or the
name and address of the original creditor, and a copy of such verification or
judgment, or name and address of the original creditor is mailed to the
consumer by the debt collector.
7. The consumer notification is complete upon receipt.
The debtor will be given the mini Miranda warning notice that
This communication is from a debt collector.
This is an attempt to collect a debt.
Any information obtained will be used for that purpose.
The debtor may later be given notice that a returned payment fee of $20 will be charged to
him or her when any check received to
apply on his or her account is not paid upon presentment. CRS 13-21-109(1)(b)(I)
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Overshadowing is the name given to language which blurs the meaning of the
notices required to be given a consumer in the first written communication from
a debt collector. As indicated above, essentially, those rights are:
1. The right to dispute the debt, and
2. The right to validation of the debt if the debt collector desires to
continue further communication (verbal, written or lawsuit) in connection with
connection with collection of the debt.
Because defendants have litigated
whether the notice was sufficiently clear for the least sophisticated debtor to
understand, it is better practice to simply provide the validation letter
without further demand at that time. This eliminates an overshadowing defense.
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A copy of the validation letter, USPS certified mail payment receipt and USPS
green receipt card will be attached as an exhibit to the complaint to establish
compliance with the FDCPA and
the CFDCPA. |
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If there is no agreement or
provision of law for a different rate, the interest on money shall be at the
rate of eight percent per annum, compounded annually.
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5-12-101. |
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Unless a written contract or agreement provides otherwise, a creditor is
entitled to statutory interest at the rate of 8.0% per annum on unpaid debt
compounded annually for all moneys or the value of all property after they are
wrongfully withheld or after they become due to the date of payment or to the
date judgment is entered, whichever first occurs. CRS
5-12-102(1)(b) -
paraphrased.
The inquiry under this section is whether the money or property was
wrongfully withheld from the nonbreaching party, and not whether the nature of
the conduct of the breaching party brings him or her within the ambit of the
statute. Rodgers v. Colorado Dept. of Human Servs., 39 P.3d 1232 (Colo.
App. 2001). CRS 5-12-102 allows interest on money which is due and owing,
regardless of whether the money was wrongfully withheld. In re Tri Systems
Consulting & Design, Inc., 115 Bankr. 279 (Bankr. D. Colo. 1990).
A verdict for the full amount due under a contract of sale is tantamount to a
determination that plaintiffs substantially complied with the terms of the
contract, and that the sums provided therein became due and payable according to
its tenor; this being so, they are entitled to statutory interest after
maturity. Baer Bros. Land & Cattle Co. v. Reed, 197 F.2d 569 (10th
Cir. 1952). Where the court concluded there was a binding contract between the
parties; thus the judgment was based upon breach of contract rather than quantum
meruit, interest was properly awarded from the time the money was due. Warde
v. Davis, 494 F.2d 655 (10th Cir. 1974); Danburg v. Realties, Inc.,
677 P.2d 439 (Colo. App. 1984). In breach of contract cases, action accrues when
breach and damages occur, and prejudgment interest accrues from the time of the
breach, not from the entry of judgment. Board of County Comm'rs of Adams
County v. City and County of Denver, 40 P.3d 25 (Colo. App. 2001).
Where a promissory note is made payable "with interest", without
specifying the rate, or the time from which the interest is to be computed, the
general rule is that the note carries interest from the date of its execution at
the legal rate fixed by law. Salazar v. Taylor, 18 Colo. 538, 33 P. 369
(1893).
Interest is allowable on mechanics' lien claims as an incident to the debt
against the property. Buerger Inv. Co. v. Salzer Lumber Co., 77 Colo.
401, 237 P. 162 (1925). Interest is allowed upon a balance due for work
performed. Wells v. Crawford, 23 Colo. App. 103, 127 P. 914 (1912).
See Donley
v. Bailey, 48 Colo. 373, 110 P. 65 (1910); Idaho Gold Coin Mining &
Milling Co. v. Colorado Iron Works Co., 49 Colo. 66, 111 P. 553 (1910).
A debtor cannot avoid the payment of interest by disputing an account, and
when the account or any portion thereof is found due, the creditor is entitled
to interest on the amount due. Quad Constr., Inc. v. Wm. A. Smith Contracting
Co., 534 F.2d 1391 (10th Cir. 1976), Florence & Cripple Creek R. R.
v. Tennant, 32 Colo. 71, 75 P. 410 (1904); York Plumbing & Heating
Co. v. Groussman Inv. Co., 166 Colo. 382, 443 P.2d 986 (1968). The mere fact
that one disputes the amount due on a bill does not render an account
unliquidated; hence, one is therefore entitled to interest from the date he
rendered his bill, at which time the account became due and payable. Western
Oil Fields, Inc. v. Coit, 29 Colo. App. 567, 487 P.2d 562 (1971). Nothing in
the statute requires that a judgment creditor establish tortious conduct by a
debtor to support award of prejudgment interest. Benham v. Manufacturers
Wholesalers Indem. Exch., 685 P.2d 249 (Colo. App. 1984); Cooper v.
Peoples Bank and Trust Co., 725 P.2d 78 (Colo. App. 1986).
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CRS 5-12-102 authorizes interest at the legal rate on the amount of a
judgment from and after entry thereof. Denver-Albuquerque Motor Transp., Inc.
v. Galligan, 145 Colo. 71, 358 P.2d 28 (1960). Interest on a judgment is
specifically authorized by CRS 5-12-102. Security Ins. Co. v. Houser, 191
Colo. 189, 552 P.2d 308 (1976). After judgment is entered, this section is
applicable in regard to collection of interest on judgment. Schoenfeld v.
Neher, 453 F.2d 896 (10th Cir. 1972). |
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The parties to any bond, bill, promissory note, or other instrument of
writing may stipulate therein for the payment of a greater or higher rate of
interest than eight percent per annum, but not exceeding forty-five percent per
annum, and any such stipulation may be enforced in any court of competent
jurisdiction in the state, except as otherwise provided in articles 1 to 6 of
this title. The rate of interest shall be deemed to be excessive of the limit
under this section only if it could have been determined at the time of the
stipulation by mathematical computation that such rate would exceed an annual
rate of forty-five percent when the rate of interest was calculated on the
unpaid balances of the debt on the assumption that the debt is to be paid
according to its terms and will not be paid before the end of the agreed term.
CRS 5-12-103. The trial court erred in awarding post-judgment interest to accrue
at 8% per annum when promissory note provided for interest to accrue at 13% per
annum until paid in full. Dikeou v. Dikeou, 916 P.2d 601 (Colo. App.
1995), rev'd on other grounds, 928 P.2d 1286 (Colo. 1996).
Generally speaking, the maximum rate of interest allowable by agreement on a
consumer loan in Colorado is 21% per annum on the unpaid balance of the amount
financed CRS 5-2-201(2)(b). There are exceptions - see CRS 5-2-201.
For information pertaining to consumer rights pertaining to interest
violations, see CRS 5-5-201. Usury can be criminally prosecuted. Refer to CRS
18-15-101, et. seq.
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This litigation web page section provides information regarding filing a lawsuit for judgment and
enforcement of the judgment to collect on a
contract, promissory note or other theory of debt obligation.
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A creditor must have a basis upon which the alleged debt is founded. That
may be:
1. Promissory note.
Hopefully the note will adequately identify the payee and maker(s), initial
principal balance, interest rate, terms of payment and amortization and will be
duly executed as an unconditional promise to make such payment.
2. Written contract.
Hopefully the contract or agreement will adequately identify the parties, the
subject matter of the agreement, consideration and terms of the agreement.
3. Oral
contract. Except in certain circumstances where an oral contract is barred
(such as interests in land) oral contracts are binding. Difficulties may
be encountered proving the oral contract if the parties offer conflicting
evidence.
4. Quasi contract. An
"almost contract" with obligation arising from the voluntary acts of
the parties in absence of an express agreement between the parties.
5. Quantum meriut. Goods
or services were provided, and creditor claims a right to payment of the
reasonable value thereof.
6. Unjust enrichment.
Defendant would be unjustly enriched if he / she were permitted to retain the
value of the goods or services received.
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GENERAL
EVIDENTIARY CONSIDERATIONS |
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It is well-settled
that the parol evidence rule excludes extrinsic evidence which varies or
contradicts the express terms of a written agreement, and that the rule applies
to sales transactions as well as to other types of contracts. Sentinel
Accept. v. Colgate, 162 Colo. 64 (Colo. 1967). The general rule is
that parol evidence is inadmissible to vary or contradict the terms of an
unambiguous agreement. Pierce v. DeZeeuw, 824 P.2d 97 (Colo. App.
1991). If an instrument is clear in its terms, complete, and free from
ambiguity, extrinsic evidence will not be permitted to modify it. Reisig
v. Resolution Trust Corp., 806 P.2d 397 (Colo. App. 1991). The
traditional exception to the parol evidence rule applies when the "evidence
is offered to establish fraud or mutual mistake or mistake of law." Light
v. Rogers, 125 Colo. 209, 242 P.2d 234 (1952); see Martin v. Cole, 3
Colo. 113 (1876); Johnson v. Cummings, 12 Colo. App. 17, 55 P. 269 (1898)
cited in Boyles v. Orion, 761 P.2d 278 (Colo. App. 1988)
Ordinarily a note is prima facie
evidence of an obligation. McCaffrey v. Mitchell, 98 Colo. 467, 56
P.2d 926 (1936). Written contract and
promissory note would be a plaintiff's attorney's first choice. If
defenses may arise from original documents or lack thereof, it may be advisable
to delay lawsuit and arrange a new written agreement and promissory note with
the debtor. Under law of merger, prior agreements, covenants, and
conversations are merged into the final, formal, written contracts executed by
the parties. City of Westminster v. Skyline Vista Development Co.,
163 Colo. 394, 431 P.2d 26 (1967); Skidmore v. First Bank, 773 P.2d 587
(Colo. App. 1988) cited in Batterman v. Wells Fargo, 802 P.2d 1112 (Colo.
App. 1990).
Should a creditor
client decide to proceed to lawsuit when documentation is defective or lacking
or when it appears the debtor may have a legitimate defense, unfavorable
judgment on the merits may enter. The doctrine of res judicata provides
that a final judgment on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies in all later suits on
points or matters determined in the former suit. Whitman v. People, 161
Colo. 117, 420 P.2d 244 (1966). It bars relitigation not only of all issues
actually decided, but of all issues that might have been decided. Pomeroy v.
Waitkus, 183 Colo. 344, 517 P.2d 396 (1973). For this doctrine to
apply to a judgment of dismissal, there must have been final judgment on the
merits. Brown v. Felsen, 442 U.S. 127, 99 S.Ct. 2205, 60 L.Ed.2d 767
(1979); Dash v. Rubey, 144 Colo. 481, 357 P.2d 81 (1960). A judgment
based on any preliminary, subsidiary, or technical grounds is not an
adjudication upon the merits. Saunders v. Bankston, 31 Colo. App. 551,
506 P.2d 1253 (1972). Nor is a judgment dismissing an action or claim for lack
of jurisdiction an adjudication on the merits. I am a conservative
attorney. To avoid potential total loss of claim under such circumstances,
I advise my clients to briefly delay litigation in favor of a new written
agreement and promissory note with the debtor.
Renegotiating new
agreements, creditors must avoid a contract of adhesion. That is
essentially a contract drafted unilaterally by a business enterprise and forced
upon an unwilling and often unknowing public for services that cannot be
obtained elsewhere. It is generally not bargained for, but is imposed on a take
it or leave it basis. Jones v. Dressel, 623 P.2d 370 (Colo. 1981). The
remedies recognized for contracts of adhesion are to treat the contract as
unenforceable or to excise from the contract that particular term. The
recognized rationales for these remedies are usually stated in terms of
unconscionability, violation of public policy, or lack of true assent. See J.
Calamari & N. Perillo, Contracts § 9-44 (3d ed. 1987). Neither
these rationales nor tort liability and accompanying damages are justifiably
imposed on a party to a contract whose only "wrong" was to use its
superior bargaining position to protect its investment by requiring protective
terms in the contract. Such claims were properly dismissed in Batterman
v. Wells Fargo, 802 P.2d 1112 (Colo. App. 1990). |
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CRS 13-80-116. Action against joint debtors or obligors.
If, in an action against joint
debtors or obligors, the plaintiff is barred by the provisions of this article
as to one or more of the debtors or obligors, but is entitled to recover against
any other of them by virtue of a new acknowledgment, promise, or payment, the
plaintiff shall be entitled to proceed as against that defendant.
CRS 13-80-117. No dismissal for nonjoinder.
In an action on contract, it shall
not be a defense that the plaintiff failed to join a person against whom claim
is barred by this article.
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Jurisdictional Limits - contract actions, torts or suits for money damages.
| Small Claims Court * |
| $0 - $7,500
CRS 13-6-403 jurisdiction concurrent with County & District Courts |
| County
Court |
| $0 -
$15,000 CRS 13-6-104 jurisdiction concurrent with District Court |
| District
Court |
| All civil actions-
- no dollar limit CRS 13-1-124 |
County court rules provide for limited pleadings. Procedural rules were
established for expeditious (rapid) resolution of smaller claims. Put
another way - county court civil litigation was set up as a grist mill. As
a general rule, collection lawsuits near the county court $15,000 limitation
should be brought in county court, waiving any claim above $15,000.
Naturally if the debt is significantly higher, suit would be initiated in
district court.
* As a general rule, attorneys are not allowed to practice in small claims court.
C.R.Civ.P. 520 This preserves the nature of the
"Judge Wapner or Judge Judy - The People"s Court" concept as an
informal forum for private citizens to resolve their differences on even
footing. There are exceptions. C.R.Civ.P. 520(b)&(e), C.R.Civ.P.
509(b)(2) and CRS 13-6-407; the primary exception being the defendant files
notice that defendant will be represented by counsel. When
counsel has been retained in such a pending case, the attorney will file a
motion to remove the lawsuit to the county court. |
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C.R.Civ.P. 98. Place of Trial
(b) Venue for
Recovery of Penalty, etc. Actions upon the following claims shall be tried in
the county where the claim, or some part thereof, arose:
(1) For the recovery of a penalty or forfeiture imposed by statute, except that
when it is imposed for an offense committed on a lake, river, or other stream of
water, situated in two or more counties, the action may be brought in any county
bordering on such lake, river, or stream and opposite the place where the
offense was committed;
(2) Against a public officer or person specially appointed to execute his
duties, for an act done by him in virtue of his office, or against a person who
by his command, or in his aid, does anything touching the duties of such
officer, or for a failure to perform any act or duty which he is by law required
to perform.
(c) Venue for Tort, Contract, and
Other Actions.
(1) Except as provided in sections (a), (b), and (c) (2) through (6) of this
Rule, an action shall be tried in the county in which the defendants, or any of
them, may reside at the commencement of the action, or in the county where the
plaintiff resides when service is made on the defendant in such county; or if
the defendant is a nonresident of this state, the same may be tried in any
county in which the defendant may be found in this state, or in the county
designated in the complaint, and if any defendant is about to depart from the
state, such action may be tried in any county where plaintiff resides, or where
defendant may be found and service had.
(2) Except as provided in subsection (3) of this section, an action on book
account or for goods sold and delivered may also be tried in the county where
the plaintiff resides or where the goods were sold; an action upon contract may
also be tried in the county where the same was to be performed.
(3) (A) For the purposes of this Rule, a consumer contract is any sale, lease,
or loan in which (i) the buyer, lessee, or debtor is a person other than an
organization; (ii) the goods are purchased or leased, the services are obtained,
or the debt is incurred, primarily for a personal, family, or household purpose;
and (iii) the initial amount due under the contract, the total amount initially
payable under the lease, or the initial principal does not exceed twenty-five
thousand dollars.
(B) An action on a consumer contract shall be tried (i) in the county in which
the contract was signed or entered into by any defendant; or (ii) in the county
in which any defendant resided at the time the contract was entered into; or
(iii) in the county in which any defendant resides at the time the action is
commenced. If the defendant is a nonresident of this state, the same may be
tried in any county in which the defendant may be found in this state, or in the
county designated in the complaint, and if any defendant is about to depart from
the state, such action may be tried in any county where plaintiff resides, or
where defendant may be found and service had.
(C) In any action on a consumer contract if the plaintiff fails to state facts
in the complaint or by affidavit showing that the action has been commenced in
the proper county as described in this Rule, or if it appears from the stated
facts that venue is improper, the court may, upon its own motion or upon motion
of any party, dismiss any such action without prejudice; however, if appropriate
facts appear in the record, the court shall transfer the action to an
appropriate county. Any provision or authorization in any consumer contract
purporting to waive any rights under subsection (3) of section (c) of this Rule
is void.
(D) Any debt collector covered by the provisions of the Federal "Fair Debt
Collection Practices Act" shall comply with the provisions of said Act set
forth in 15 U.S.C. 1692(i) concerning legal actions by debt collectors,
notwithstanding any provision of this Rule.
(4) An action upon a contract for services may also be tried in the county in
which the services were to be performed.
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C.R.Civ.P. 398. Place of Trial
(b) Venue for Recovery of Penalty,
etc. Actions upon the following claims shall be tried in the county where the
claim, or some part thereof, arose:
(1) For the recovery of a penalty or forfeiture imposed by statute, except that
when it is imposed for an offense committed on a lake, river, or other stream of
water, situated in two or more counties, the action may be brought in any county
bordering on such lake, river or stream and opposite the place where the offense
was committed.
(2) Against a public officer or person specially appointed to execute his
duties, for an act done by him in virtue of his office, or against a person who
by his command, or in his aid, does anything touching the duties of such
officer, or for a failure to perform any act or duty which he is by law required
to perform.
(c) Venue for Tort and Contract and
Other Actions.
(1) Except as provided in sections (a) and (b) and subsections
(c) (2) through (5) of this Rule, an action shall be tried in the county in
which the defendants, or any of them, may reside at the commencement of the
action, or in the county where the plaintiff resides when service is made on the
defendant in such county; or if the defendant is a nonresident of this state,
the same may be tried in any county in which the defendant may be found in this
state, or in the county designated in the complaint, and if any defendant is
about to depart from the state, such action may be tried in any county where
plaintiff resides, or where defendant may be found and service had.
(2) Except as provided in subsection (3) of this section an action on book
account or for goods sold and delivered may also be tried in the county where
the plaintiff resides or where the goods were sold; an action upon contract may
also be tried in the county where the same was to be performed.
(3) (A) For the purposes of this Rule, a consumer contract is any sale, lease or
loan in which (i) the buyer, lessee or debtor is a person other than an
organization; (ii) the goods are purchased or leased, the services are obtained,
or the debt is incurred, primarily for a personal, family, or household purpose;
and (iii) the initial amount due under the contract, the total amount initially
payable under the lease, or the initial principal does not exceed twenty-five
thousand dollars.
(B) An action on a consumer contract shall be tried (i) in the county in which
the contract was signed or entered into by any defendant; or (ii) in the county
in which any defendant resided at the time the contract was entered into; or
(iii) in the county in which any defendant resides at the time the action is
commenced. If the defendant is a nonresident of this state, the same may be
tried in any county in which the defendant may be found in this state, or in the
county designated in the complaint, and if any defendant is about to depart from
the state, such action may be tried in any county where plaintiff resides, or
where defendant may be found and service had.
(C) In any action on a consumer contract, if the plaintiff fails to state facts
in the complaint or by affidavit showing that the action has been commenced in
the proper county as described in this Rule, or if it appears from the stated
facts the venue is improper, the court may, upon its own motion or upon motion
of any party, dismiss any such action without prejudice; however, if appropriate
facts appear in the record, the court shall transfer the action to an
appropriate county. Any provision or authorization in any consumer contract
purporting to waive any rights under subsection (3) of section (c) of this Rule
is void.
(D) Any debt collector covered by the provisions of the Federal "Fair Debt
Collection Practices Act" shall comply with the provisions of said Act set
forth in 15 U.S.C. 1692(i) concerning legal actions by debt collectors,
notwithstanding any provision of this Rule.
(4) An action upon a contract for services may also be tried in the county in
which the services were to be performed.
(5) An action for tort may also be tried in the county where the tort was
committed. |
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FILING FEES AND COURT COSTS
e-Filing
availability and court mandatory requirements
note:
information may be obsolete |
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filing fees and court costs change with
regularity ** courts & government change website
locations with regularity ** §§ may be obsolete.
refer to
judicial
site fees & costs link above - even that link may become obsolete quickly |
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COST OR OTHER EXPENSE |
COUNTY
COURT |
DISTRICT
COURT |
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Filing Fee - Plaintiff
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$ 80.00
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$224.00
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Answer Fee - Defendant or Third Party Defendant
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$ 75.00
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$158.00
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Motion Dismiss for Failure to File a Complaint
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$ 55.00
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$ 55.00
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Counter Claim
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$ 79.00
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$158.00
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Cross Claim
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$ 79.00
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$158.00
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Filing Fee - Third Party Plaintiff
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$ 79.00
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$223.00
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Filing Fee - Intervenor (adds new party)
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$ 75.00
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$223.00
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Docket Fee - Judgment Creditor
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$ 70.00
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$ 70.00
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Additional Fees Judgment Judgment Debtor
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Judgment $ 5,000 - $10,000
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n/a
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$ 10.00
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Judgment $10,000 - $20,000
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n/a
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$ 30.00
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Judgment $20,000 - $30,000
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n/a
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$ 50.00
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Judgment $30,000 - $50,000
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n/a
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$ 90.00
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Judgment $50,000 and over - $90.00 + $2.00 for each $1,000 over $50,000
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n/a
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District Court Only
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Transcript of Judgment
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$ 25.00
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$ 25.00
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Writ of Garnishment
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$ 45.00
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$ 45.00
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Writ of Execution
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$ 45.00
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$ 45.00
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Writ of Attachment
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$ 65.00
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$ 65.00
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Creditor's Docket Fee - C.R.Civ.P. §§ 369 & 69 - Execution & Supplemental Proceedings |
$ 70.00
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$ 70.00
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Certificate of Dismissal or No Suit Pending
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$ 20.00
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$ 20.00
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Satisfaction of Judgment
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$ 20.00
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$ 20.00
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NSF Check Fee
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$ 50.00
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$ 50.00
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Photocopies - Per Page
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$ 0.75
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$ 0.75
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Certification - Per Document or Proceeding
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$ 20.00
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$ 20.00
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Exemplification - Per Document or Proceeding
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$ 20.00
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$ 20.00
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Jury Demand Fee
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$ 98.00
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$190.00
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Filing Fee - Rule 120 Foreclosure
Petitioner
Respondent
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n/a
n/a
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$224.00
$158.00
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Filing Fee - Foreign Judgment Registration
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$166.00
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$166.00
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Filing Fee - Administrative Hearings Appeal
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n/a
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$224.00
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Transcript Deposit - Administrative Hearings Appeal
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n/a
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$125.00
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Filing Fee - Civil Appeal
Appellant
Appellee
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n/a
n/a
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$163.00
$158.00
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Filing Fee - Criminal Appeal - County or Municipal Court
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n/a
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$ 70..00
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Clerk and Recorder filing fee: $6.00 per
page
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SMALL CLAIMS COURT COST
OR OTHER EXPENSE
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COURT
COST |
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Plaintiff
Up to $500
$500.01 - $7,500
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$ 31.00
$ 55.00
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Defendant
Up to $500
$500.01 - $7,500
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$ 26.00
$ 41.00
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Party with Counter Claim
Plaintiff's claim is less than $500 and
Counter claim less than $500
Plaintiff's claim is less than $500 and
Counter claim is between
$500.01 and $7,500
Plaintiff's claim is between $500.01 and $7,500
Counter claim is between $0.01
and $7,500
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$ 31.00
$ 46.00
$ 46.00
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Docket Fee - Judgment Creditor
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$ 70.00
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| refer to link - lawsuit or enforcement may be barred |
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Many attorneys will prepare the lawsuit and serve upon the debtor before filing
with the court. If the debtor has moved and can not be found, this saves
the expense of the court filing fee. However, there are dangers to service
before filing.
Under C.R.Civ.P. §§ 3(a) &
303(a), if the lawsuit is not filed within ten (10) days, defendant may
request dismissal and award of expenses of inconvenience, including reasonable
attorney's fees. Jurisdiction does not attach if filing is more than
ten(1) days after service. C.R.Civ.P. §§ 3(b) 303(c).
In county court actions, under C.R.Civ.P.
312(a) the
appearance date must be set no more than sixty (60) days from the date of
filing, and service must be obtained at least ten (10) days in advance of the
appearance date.
A process server, particularly if served in another county or if served by a
deputy sheriff, may run slow returning the affidavit of service of
process. Counsel could have a heavy caseload and filing could be delayed. There are a myriad of
reasons why the 10 day filing rule could be missed. If aware of the rule, a
debtor would likely attempt to make hay with a 10 day filing jurisdictional
defect. Neither creditor client nor counsel desires to be liable to
a debtor for inconvenience, attorney's fees and costs because of an avoidable
time delay defect.
To avoid the possibility of sanctions under C.R.Civ.P. §§ 3(a) & 303(a), I
file the lawsuit before sending for service of process. Do not request
otherwise. To avoid inability to timely serve before appearance date and
the necessity of "alias summons" issued by the clerk of court, before
filing I insist upon a good address to serve
the debtor. Creditor clients should verify debtor's address prior
to referral for litigation, or request
skip
tracing.
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With the complaint, Plaintiff will also file an affidavit of account. This
is an affidavit of plaintiff or plaintiff's authorized agent setting forth the
basis of the claim. As an example, the original contract, bad check, or
other written documentation must be attached. When referring the case for
litigation, send the original documentation, not copies. This also works
as validation of the debt.
A summons and complaint will be served upon the debtor / defendant. the
summons contains a return date. At the return date, defendant will:
a. Default - fail to appear in which case judgment should enter for the
creditor / plaintiff
b. Appear and enter into a stipulation in lieu of judgment
c. Appear and confess judgment
d. Appear and contest the debt - setting the case for trial.
Plaintiff may move for summary judgment.
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If a defendant fails to appear, default judgment may be entered. CRS
13-63-101, C.R.Civ.P. §§ 55, 355. Default judgment is as valid as judgment entered after contested proceedings,
trial or court trial. The difference is that with default judgment, a
defendant has the opportunity to file a motion to set aside for alleged
non-service or excusable neglect. C.R.Civ.P. §§ 60(b), 360(b). |
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STIPULATION
IN LIEU OF JUDGMENT |
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When the defendant stipulates to judgment, judgment is not actually entered of
record.
1.
Mechanism. A payment
agreement is made between defendant and counsel.
a. If defendant voluntarily complies with the payment agreement, the debt
is amortized without judgment entering.
b. If defendant fails to comply with the payment agreement, counsel
submits a motion for entry of judgment and proceeds with involuntary debt
enforcement.
2.
Advantages.
a. Creditor. Creditor amortizes the debt without further
litigation if defendant complies. Judgment can be taken upon motion in the
event of non-compliance.
b. Debtor. For a defendant, this has the advantage of avoidance of a
lien against real property or perhaps impairing defendant's future ability to
procure a loan or purchase a vehicle with a secured loan. |
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When the defendant confesses judgment, judgment is entered of record.
Unless the creditor client authorizes and defendant agrees to a payment plan,
counsel will proceed with involuntary enforcement of the judgment.
Confession of judgment saves the time and expense of trial. |
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DENIAL
OF LIABILITY AND TRIAL |
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When the defendant files an answer denying liability, the case will likely be
set for pre-trial conference and trial. Either party may request a jury
trial upon payment of the
jury deposit. Each
party may introduce testimony and exhibits. At the close of evidence, the
factfinder (judge in a trial to the court or jury in a jury trial) will make a
determination of liability and the amount thereof, if any. If a debtor
makes a frivolous defense, defendant would be liable for creditor plaintiff's
attorney's fees and costs.
Frivolous or
groundless suit / defense. |
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District
Court. C.R.Civ.P. 56(c)
provides that summary judgment "shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a matter
of law." When a motion for summary judgment is submitted and
supported by an affidavit, an adverse party may not rest on the mere allegation
of his pleadings, but must by affidavit or otherwise set forth specific facts
showing there is a genuine issue for trial. C.R.Civ.P. 56(e); GTM Investments
v. Depot, Inc., 694 P.2d 379 (Colo. App. 1984) cited in Reisig v.
Resolution Trust Corp., 806 P.2d 397 (Colo. App. 1991). No
corresponding summary judgment county court rule. |
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Upon payment in
full of the underlying debt, creditor must file a satisfaction of
judgment. Failure to do so may result in an action for damages brought by
the judgment debtor. In county court actions, under C.R.Civ.P. 358(b), at
the expiration of 6 years, the clerk of court is required to enter a
satisfaction of judgment unless the judgment is revived pursuant to C.R.Civ.P.
354(h). |
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INTEREST
refer to the above link for information |
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Unless a written contract or agreement provides for award of attorney's fees and
costs, judgment will not include fees and costs. Exception: lawsuit or
defense which the court determines is frivolous, groundless or lacked substantial justification.
CRS 13-17-§§101 & 102, C.R.Civ.P. §§ 11(a), 311(a).
If the written contract or agreement provides for award of actual attorney's
fees and costs, the client has a better chance of obtaining award of hourly
billed fees. If the written contract or agreement simply provides for
award of fees and cots, or award or reasonable fees, 15% of the principal debt
may likely be the maximum award.
CRS 13-17-103. Procedure for determining reasonable fee - judicial
discretion.
(1) In determining the amount of an
attorney fee award, the court shall exercise its sound discretion. When granting
an award of attorney fees, the court shall specifically set forth the reasons
for said award and shall consider the following factors, among others, in
determining whether to assess attorney fees and the amount of attorney fees to
be assessed against any offending attorney or party:
(a) The extent of any effort made to determine the validity of any action or
claim before said action or claim was asserted;
(b) The extent of any effort made after the commencement of an action to reduce
the number of claims or defenses being asserted or to dismiss claims or defenses
found not to be valid within an action;
(c) The availability of facts to assist a party in determining the validity of a
claim or defense;
(d) The relative financial positions of the parties involved;
(e) Whether or not the action was prosecuted or defended, in whole or in part,
in bad faith;
(f) Whether or not issues of fact determinative of the validity of a party's
claim or defense were reasonably in conflict;
(g) The extent to which the party prevailed with respect to the amount of and
number of claims in controversy;
(h) The amount and conditions of any offer of judgment or settlement as related
to the amount and conditions of the ultimate relief granted by the court.
CRS 13-17-104. Fee arrangements between attorney and client.
The attorney and his client shall remain free to negotiate in private the actual
fee which the client is to pay his attorney.
CRS 13-17-105. Stipulation as to fees.
With the approval of the court, two or
more parties to an action may agree, by written stipulation filed with the court
or by oral stipulation in open court, to no award of attorney fees or an award
of attorney fees in a manner different from that provided in this article.
The requirement of CRS 13-17-103
that the court consider specified factors in determining whether to award
attorney fees necessarily requires that a hearing be provided for the parties to
address such factors and for the court to make an informed decision. Irwin v.
Elam Const., Inc., 793 P.2d 609 (Colo. 1990), City of Littleton v. State,
832 P.2d 985 (Colo. App. 1991).
Where the law does not provide a
specific definition of "reasonable", such compensation should be
determined in light of all circumstances for the time and effort reasonably
expended by the prevailing party's attorney. If trial court does not make
initial determination as to reasonableness of hours expended by plaintiff's
counsel, the record will be insufficient for reviewing court to resolve issue of
reasonableness of fees on appeal. Spensieri v. Farmers Alliance Mutual Ins.,
804 P.2d 268 (Colo. App. 1990).
A post-trial motion for the award
of fees is analogous to a request for taxing costs; it is not similar to a
motion to amend the judgment. See C.R.Civ.P. 58(a); Budinich v. Becton
Dickinson & Co., 486 U.S. 196, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988); White
v. New Hampshire Department of Employment Security, supra. A trial
court may address the issue of the award of attorney fees for services rendered
in connection with the underlying litigation on a post-trial basis, irrespective
whether counsel has previously sought to "reserve" that issue.
In considering such an issue, the post-trial procedures established by C.R.Civ.P.
54(d) and 121 § 1-22 for the award of costs should be used as the general
guidelines for the consideration and award of this type of attorney fees, but
subject to the parties' right to demand an evidentiary hearing. See Pedlow v.
Stamp, 776 P.2d 382 (Colo. 1989), Roa v. Miller, 784 P.2d 826 (Colo.
App. 1989).
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Creditors must recognize there is no "debtor's prison."
CRS
13-59-101. No imprisonment for debt. There shall be no imprisonment or arrest for debt in this state in any case upon any contract, expressed or implied.
CRS
13-59-102. Execution against the body. No execution shall issue against the body of any defendant in a civil action.
This means non-payment of a civil
debt is not grounds for imposition of jail.
However, contempt imprisonment
order can enter should a debtor fail to appear for a post judgment creditor's
examination or alternatively fail to answer post judgment creditor's
interrogatories. |
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In a district court action, an automatic stay of enforcement prohibits plaintiff
from executing on the judgment for a period of fifteen (15) days from judgment
entry. C.R.Civ.P. 62(a). No automatic stay exists in county court
judgments. C.R.Civ.P. 362(a)
A judgment creditor must locate debtor's assets, if any, to satisfy a judgment.
Multiple remedies available. The most common are:
| District Court & County Court |
1. Garnishment of
wages or income C.R.Civ.P. 103 §1
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2. Default judgment
vs. garnishee C.R.Civ.P. 69 & C.R.Civ.P. 103
Garnishee failure
to answer
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3. Garnishment of
bank accounts, insurance policies or other assets C.R.Civ.P. 103 §2
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4. Traverse of answer
- garnishment C.R.Civ.P. 103 §8
Judgment creditor
believes garnishee in possession of debtor's monies or assets
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5. Filing a
transcript of judgment with the county clerk and recorder -
creation of a lien
CRS 13-52-102
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6. Writ of execution,
levy against non-exempt property and
Sale of Lands - CRS
13-56-201
Sale of Chattels
CRS 13-57-101
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1. Creditor's
examination - C.R.Civ.P. 69
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deposition of judgment debtor or debtors of judgment debtor
documentation may be ordered produced - subpoena duces tecum
2. Failure to appear or answer: contempt citation
a. bond +
proceedings against bond
b. contempt
finding and jail
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1. Creditor's
Interrogatories
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2. Failure to answer:
contempt citation
a. completion
of interrogatories at show cause hearing, or
b. failure to
appear or answer - bond + proceedings against bond
c. failure to
appear or answer - contempt finding and jail
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a few debt
collection .pdf files are linked directly from this webpage - refer to
judiciary forms above for additional forms
Adobe Acrobat Reader
version 5 or later is required to view .pdf files 
Free Download
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Instructions
- Collecting a Judgment & Writs of Garnishment
Creditor's
Interrogatories to Judgment Debtor
Writ
of Continuing Garnishment
Calculation of Exempt Earnings
Objection to Calculation of Exempt Earnings
Writ
of Garnishment with Notice of Exemption and Pending Levy
Claim of Exemption to Writ of Garnishment with Notice
Writ
of Garnishment - Judgment Debtor Other than Natural Person
Writ
of Garnishment in Aid of Attachment
Writ
of Garnishment for Support
Notice to Garnishee, Application of Funds to Judgment,
and Release of Funds to Judgment Creditor
Notice
of Levy
Satisfaction
of Judgment |
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Continuing writ of garnishment
is valid for a period of 180 days, after which a new writ must be obtained and
served upon the employer. CRS 13-54.5-102, C.R.Civ.P. The requirement to serve multiple writs over time is somewhat of an
inconvenience, but better than the previous 90 day limitation.
Notice to judgment debtor |
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Continuing writ of
garnishment CRS 13-54.5-105. Notice to judgment debtor in continuing garnishment. In a case of continuing garnishment, the judgment creditor shall serve two copies of the writ of continuing garnishment upon the garnishee, one copy of which the garnishee shall deliver to the judgment debtor as provided in section 13-54.5-107. Such writ shall include notice to the judgment debtor of the formula used to calculate the amount of exempt earnings owed to the judgment debtor for a single pay period and the amount of nonexempt earnings payable to the judgment creditor for a single pay period, and such writ shall contain notice to the judgment debtor of his right to object to such calculation of exempt and nonexempt earnings and his right to a hearing on such objection.
Garnishment other than
continuing writ of garnishment
CRS 13-54-101(7) and CRS
13-54.5-106. Notice of exemption and pending levy is required.
this would include, but not be limited to garnishments on a bank account.
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CRS 13-54.5-106. Notice to judgment debtor in other garnishment.
(1) In a case where personal property of the judgment debtor other than earnings is subject to garnishment, following the service of the writ of garnishment on the garnishee, the person who served said writ shall, as soon as practicable, serve a copy of the writ of garnishment, together with a notice of exemption and pending levy, upon each judgment debtor whose property is subject to garnishment by said writ. The notice of exemption and pending levy shall inform the judgment debtor that the judgment creditor intends to seek satisfaction of any judgment rendered in its favor against the judgment debtor out of the judgment debtor's personal property in the possession or control of the garnishee and shall inform the judgment debtor of his right to claim exempt property.
(2) This subsection sets forth
the required information which must be contained in the notice of exemption and pending levy.
Omitted for brevity - refer to the statute. |
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Debtor Objection and Hearing
CRS
13-54-108 and CRS 13-54.5-109. Debtor may file an objection the the
garnishment which will stay further seizure, and expedited hearing will be
held. Provisions regarding debtor exemption claim from levy and sale are
contained in to CRS 13-55-101 et. seq. |
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Priorities - CRS
13-54.5-104. Garnishments are first served, first paid - except for family
support garnishments or assignments which take priority regardless of when
served. Support orders may last several years. Therefore, if the
debtor has a support income assignment or support garnishment, the creditor must
pretty much look elsewhere to satisfy judgment.
Bank accounts. Debtor
may claim proceeds in a bank account are identifiable wages. Naturally, a
creditor would disagree and this issue would be the subject of a court dispute.
Generally bank account garnishments are not subject to the above limitations.
Moneys in student's bank account, which are proceeds of federally guaranteed student loan, are not garnishable pursuant to a judgment based on antecedent business debt of student.
Schaerrer v. Westman Comm'n Co., 769 P.2d 1058 (Colo. 1989).
And, judgment debtor's right to annual discretionary disbursement of the corpus of a trust is not a garnishable asset. The right to annual disbursement of funds from principal is a power of appointment, and a power of appointment is neither property nor a property right.
University National Bank v. Rhoadarmer, 827 P.2d 561 (Colo. App. 1991).
Co-Owned
Property. 28 U.S.C. § 3010 allows enforcement against property
which is owned by the debtor along with others, including but not limited to
co-owned property. This form of ownership would include, but is not limited to,
joint tenancy, co-tenancy, tenancies by the entirety, community property and
similar interests. In enforcing the remedies as to co-owned property, the law of
the state where the property is located shall determine the extent to which this
property may be subjected to payment of the debtor's debt to the United States
No discharge from employment for
garnishment. CRS 5-5-107
No employer shall discharge an employee for the reason that a creditor of the employee has subjected or attempted to subject unpaid earnings of the employee to garnishment or like proceedings directed to the employer for the purpose of paying a judgment arising from a consumer credit transaction.
An employer would be subject to
contempt of court proceedings if the employer terminated the employee due to the
garnishment. However, life is as it is. An employer may find
"other reasons" to terminate an employee whose wages are subject to
garnishment.
15 USC 1674
federal law similar provisions.
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Wage
garnishments - CRS 5-5-106, 15 USC 1673. The maximum part of the aggregate
disposable earnings of an individual that is subjected to garnishment to enforce
payment of a judgment arising from a consumer credit transaction may not exceed
the lesser of:
(a) Twenty-five percent of the individual's disposable earnings, or
(b) The amount by which the individual's disposable earnings exceed thirty times
the federal minimum hourly wage prescribed by section 206 (a) (1) of the
"Fair Labor Standards Act of 1938", 29 U.S.C. sec. 201 et sec., in
effect at the time the earnings are payable.
Disposable earnings" means
that part of the earnings of an individual remaining after the deduction from
those earnings of amounts required by law to be withheld.
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GARNISHMENT |
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GOVERNMENT PAY OR BENEFITS |
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State, County and Municipal
Governments. CRS 13-61-101. Funds subject to garnishment. The state of Colorado, municipal corporations, quasi-municipal corporations, and any officer, board, or commission thereof, having the control of the disbursing of any fund, whether the same be derived from appropriations, levies, fees, licenses, special taxes, or otherwise within the state of Colorado, shall be subject to garnishment upon writs of attachment and execution in the same manner as private corporations are subject to garnishment under such writs; except that the state of Colorado shall not be subject to garnishment regarding salaries or fees due to any officer designated as such and whose salary or fees are fixed by the provisions of the constitution of the state of Colorado.
Federal Government.
If protected under ERISA*, pension
benefits may be exempt from garnishment. Guidry v. Sheet Metal Workers
National Pension Fund, 493 U.S. 365 (1990) *Employee Retirement Income Security Act of 1974
(ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq. Railroad
retirement and unemployment benefits are exempt from Federal or State taxation,
garnishment and attachment. 38 U.S.C. § 454a]. Retirement systems
include, but are not limited to, the Civil Service Retirement and Disability
System, 5 U.S.C. ch. 83, §§ 8301 et al. (1982); the Federal Employees
Retirement System, 5 U.S.C. ch. 84, § 8401 et al. (Supp. IV 1986); the Foreign
Service Retirement and Disability System, 22 U.S.C. ch. 14, subch. VIII (1982);
the retirement provisions for members of the military services, 10 U.S.C.
chs. 61, 63, 65, 67, 69, 71, 73, 75 (1982); and the Central Intelligence Agency
Retirement and Disability System, Public Law 88-643, 78 Stat. 1043 (October 13,
1964) as amended, 50 U.S.C. § 403. Each of these systems, and others,
creates complex schemes of rights and benefits for the covered personnel and for
the surviving spouses, former spouses, and children of the covered personnel
under the respective systems. The Federal courts have generally recognized
that the Supremacy Clause of the Constitution, Article VI, section 2, will not
permit state law to apply to a statutorily-created or authorized Federal
retirement system in conflict with Federal law. Schueler v. Rayjas
Enterprises, Inc., 847 F. Supp. 1147 (S.D.N.Y. 1994)
42 U.S.C. § 659 removes many
garnishment exemptions for child support and alimony (spousal maintenance).
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CRS 13-54-102. Property exempt.
(1) The following property is exempt from levy and sale under writ of attachment or writ of execution:
(a) The necessary wearing apparel of the debtor and each dependent to the extent of one thousand five hundred dollars in value;
(b) Watches, jewelry, and articles of adornment of the debtor and each dependent to the extent of one thousand dollars in value;
(c) The library, family pictures, and school books of the debtor and the debtor's dependents to the extent of one thousand five hundred dollars in value; except that this paragraph (c) shall not apply to any such property constituting all or part of the stock in trade of the debtor;
(d) Burial sites, including spaces in mausoleums, to the extent of one site or space for the debtor and each dependent;
(e) The household goods owned and used by the debtor or the debtor's dependents to the extent of three thousand dollars in value;
(f) Provisions and fuel on hand for the use or consumption of the debtor or the debtor's dependents to the extent of six hundred dollars in value;
(g) (I) Except as otherwise provided in subparagraph (II) of this paragraph (g), in the case of every debtor engaged in agriculture as the debtor's principal occupation, including but not limited to farming, ranching, dairy production, and the raising of livestock or poultry, all livestock, poultry, or other animals, and all tractors, farm implements, trucks used in agricultural operations, harvesting equipment, seed, and agricultural machinery and tools in the aggregate value of twenty-five thousand dollars.
(II) Only one exemption in the aggregate value of twenty-five thousand dollars shall be allowed for a debtor and his or her spouse under subparagraph (I) of this paragraph (g). In the event that property is claimed as exempt by a debtor or his or her spouse under subparagraph (I) of this paragraph (g), no exemption shall be allowed for such debtor or his or her spouse under paragraph (i) of this subsection (1).
(h) Except for amounts due under court-ordered support of children or spouse which are subject to the exemption provisions of
CRS 13-54-104, all money received by any person as a pension, compensation, or allowance for any purpose on account or arising out of the services of such person as a member of the armed forces of the United States in time of war or armed conflict, and whether in the actual possession of the recipient thereof or deposited or loaned by him, and a like exemption to the unremarried widow or widower and the children of such person who receive a pension, compensation, or allowance of any kind from the United States on account or arising out of such service by a deceased member of such armed forces; and when a debtor entitled to exemption under this paragraph (h) dies or leaves his family said exemption shall extend to the dependents of said debtor;
(h.5) The articles of military equipment personally owned by members of the national guard;
(i) The stock in trade, supplies, fixtures, maps, machines, tools, electronics, equipment, books, and business materials of any debtor used and kept for the purpose of carrying on any gainful occupation in the aggregate value of ten thousand dollars;
(j) (I) One or more motor vehicles or bicycles kept and used by any debtor in the aggregate value of three thousand dollars; or
(II) (A) One or more motor vehicles kept and used by any elderly or disabled debtor, or by any debtor with an elderly or disabled spouse or dependent, in the aggregate value of six thousand dollars.
(B) For the purposes of this subparagraph (II): "Disabled person" means any person who has a physical or mental impairment which is disabling and which, because of other factors such as age, training, experience, and social setting, substantially precludes the person having such impairment from engaging in a useful occupation as a homemaker or as a wage earner in any employment which exists in the community for which he has competence; and "elderly person" means any person who is sixty-five years of age or older.
(k) The library of any debtor who is a professional person, including a minister or priest of any faith, kept and used by the debtor in carrying on his or her profession, in the value of three thousand dollars; except that exemptions with respect to any of the property described in this paragraph (k) may not also be claimed under paragraph (i) of this subsection (1);
(l) (I) (A) The cash surrender value of policies or certificates of life insurance to the extent of fifty thousand dollars for writs of attachment or writs of execution issued against the insured; except that there is no exemption for increases in cash value from moneys contributed to a policy or certificate of life insurance during the forty-eight months prior to the issuance of such writ of attachment or writ of execution; and
(B) The proceeds of policies or certificates of life insurance paid upon the death of the insured to a designated beneficiary, without limitation as to amount, for writs of attachment or writs of execution issued against the insured.
(II) The provisions of this paragraph (l) shall not be interpreted to provide an exemption for attachment or execution of the proceeds of any policy or certificate of life insurance to pay the debts of a beneficiary of such policy or certificate.
(III) The provisions of this paragraph (l) shall not provide an exemption for attachment or execution of the proceeds of any policy or certificate of life insurance if the beneficiary of such policy or certificate is the estate of the insured.
(m) The proceeds of any claim for loss, destruction, or damage and the avails of any fire or casualty insurance payable because of loss, destruction, or damage to any property which would have been exempt under this article to the extent of the exemptions incident to such property;
(n) The proceeds of any claim for damages for personal injuries suffered by any debtor except for obligations incurred for treatment of any kind for such injuries or collection of such damages;
(o) The full amount of any federal or state earned income tax credit refund;
(p) Professionally prescribed health aids for the debtor or a dependent of the debtor;
(q) The debtor's right to receive, or property that is traceable to, an award under a crime victim's reparation law;
(r) For purposes of garnishment proceedings pursuant to the provisions of article 54.5 of this title, any amount held by a third party as a security deposit, as defined in
CRS 38-12-102 (2), or any amount held by a third party as a utility deposit to secure payment for utility goods or services used or consumed by the debtor or his dependents;
(s) Property, including funds, held in or payable from any pension or retirement plan or deferred compensation plan, including those in which the debtor has received benefits or payments, has the present right to receive benefits or payments, or has the right to receive benefits or payments in the future and including pensions or plans which qualify under the federal "Employee Retirement Income Security Act of 1974" as an employee pension benefit plan, as defined in 29 U.S.C.
1002, any individual retirement account, as defined in 26 U.S.C. 408, any Roth individual retirement account, as defined in 26 U.S.C.
408A, and any plan, as defined in 26 U.S.C. 401, and as these plans may be amended from time to time;
(t) All property which is subject to a judgment against a debtor for failure to pay state income tax to a state for periods when such individual was not a resident of such state on benefits received from a pension or other retirement plan;
(u) Any child support obligation or child support payment required by a support order if the requirements of
CRS 13-54-102.5 are met.
(2) Notwithstanding the provisions of paragraph (h) of subsection (1) of this section and
CRS 13-54-104, military pensions shall be subject to court-ordered support of children or spouse.
(3) Notwithstanding the provisions of paragraph (s) of subsection (1) of this section, any pension or retirement benefit or payment shall be subject to attachment or levy in satisfaction of a judgment taken for arrearages for child support or for child support debt, subject to the limitations contained in
CRS 13-54-104.
(4) Notwithstanding anything to the contrary in this section, all property of a person who has committed a felonious killing, as defined in
CRS 15-11-803 (1) (b), and as determined in the manner described in CRS 15-11-803 (7),
shall be subject to attachment or levy in satisfaction of a judgment awarded pursuant to
CRS 13-21-201 or CRS 13-21-202 for such felonious killing.
CRS 13-54-102.5. Child support payments - exemption - deposit into custodial
account.
(1) Any past or present child support obligation owed by a parent or child support payment made by a parent that is required by a support order is exempt from levy under writ of attachment or writ of execution for any debt owed by either parent. A child support payment is no longer exempt under the provisions of this section if the recipient of the payment intermingles the payment with any other moneys.
(2) A child support payment is only exempt under the provisions of subsection (1) of this section after the payment is deposited in a bank, savings and loan, or credit union account if the account is a custodial account for the benefit of the child designated for child support payments and if no moneys other than child support payments made pursuant to a support order or interest earned on the moneys in the account are deposited into the account.
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Criteria for recognition of foreign judgments are contained in CRS 13-62-101,
et. seq
Uniform Foreign Money-Judgments Recognition Act. |
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LEGAL
FORMS - SELF HELP
to find legal forms, refer to links |
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Many businesses simply deposit an
NSF check again in their own account. The creditor's bank will likely
process the check through normal banking channels a second time, but no
more. That procedure is convenient, but perhaps not the most effective
remedy. Time is lost if the check is again returned NSF, and creditor's
bank may have a service fee for the charge backs.
Debtor's bank may possibly solve
the NSF check problem. Rather than re-deposit, the first step to
collecting an NSF check is to contact the bookkeeping department of debtor's
bank - the address and phone number are frequently printed in the bottom right
corner of the check. If there are sufficient funds in the debtor's account
to clear the check, it may be prudent to drive to debtor's bank and cash the
check on the spot. Problem solved, particularly if the check is for a
large amount or the creditor is in need of the cash flow. Additionally,
this precludes another check slipping in depleting the account balance to the
point where creditor's check will not clear.
However, production at debtor's
bank may be impractical if the bank is out of town or the check amount is
small. Also, there may not be sufficient funds in the account to clear the
check at the time of creditor's phone call. After talking with
bookkeeping, ask to speak to the collection teller - all banks have one.
Obtain the collection teller's name, and inquire of 1.) the cost to submit a
check for collection and 2.) how long the check will be held. Some banks
provide collection service at no cost, others charge for the service. Some
banks will hold the checks only 2 or 3 days, others will hold for extended
periods of time. Each morning before commencement of business, the
collection teller will check the debtor's account to determine whether
sufficient funds are on deposit to clear the submitted check. If so, the
NSF check will be paid before any other business of the day and the bank's
payment will be mailed to the creditor. As with production at debtor's
bank, this is an effective remedy to solve the problem.
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Creditor must know the debtor's
whereabouts. If unknown,
skip
tracing may be required.
When a person obtains money,
merchandise, property, or other thing of value, or makes any payment of any
obligation other than an obligation on a consumer credit transaction as defined
in CRS 5-1-301, by means of making any check, draft, or order for the payment of
money upon any bank, depository, person, firm, or corporation, and when the
instrument is not paid upon its presentment, that person is liable to the holder
of such check, draft, or order or any assignee for collection for one of the
following.
a. The face amount of the check, draft, or order plus actual damages
determined in accordance with the provisions of the "Uniform Commercial
Code", title 4, CRS; or
b. 1. An amount equal to the face amount of the check, draft, or
order and:
2. The amount of any reasonable posted or contractual charge not exceeding
twenty dollars.
CRS 13-21-109(1)
The
Statute of
Limitations is 6
years. CRS 13-80-103.5(1)(c)
Unless the check is cashed at
debtor's bank, demand should immediately be made upon debtor for cash payment to
redeem the check, plus administrative fee. This would be followed with
litigation if the NSF check unpaid.
If statutorily required written notice of
nonpayment has been given and the total amount due as set forth in the notice
has not been paid within fifteen days after such notice is given, instead of the
amounts set forth above, the person shall be liable to the holder or any
assignee for collection for three times the face amount of the check but not
less than one hundred dollars.
Treble damages
may not be collected if:
a. there was sufficient money in the account to cover all checks - bank error
b. the check bounced because a paycheck deposited in the account bounced
c. the account was garnished without prior notice
d. the maker was incompetent or a minor
e. the making was induced by fraud or duress
f. the transaction lacked consideration or was illegal
CRS 13-21-109(2)
The
Statute of
Limitations is 2
years. CRS 13-80-102(1)(k)
Unless the check is cashed at
debtor's bank, demand should immediately be made upon debtor for treble damages
($100 minimum) if the NSF check has not been cured within fifteen days.
This would be followed with litigation if the NSF check unpaid.
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OTHER
NSF CHECK
ISSUES
refer to link for information |
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Lawsuit or enforcement may be barred
Each remedy referenced in this NSF Check webpage section contains specific time
limitations
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Knowingly writing a bad
check is not only discourteous, it is a crime - fraud by check. CRS
18-5-205
CRS 18-5-205(4) provides: Any person having acquired rights
with respect to a check which is not paid because the drawer has insufficient
funds shall have standing to file a complaint under this section, whether or not
he is the payee, holder, or bearer of the check.
Criminal
Statute of
Limitations
Refer to the link for the
period of time in which a criminal prosecution must be initiated or is barred.
Upon criminal
conviction, restitution is a mandatory condition of deferred sentence, home
detention, jail alternatives, probation or intensive supervision probation
programs (ISP). CRS §§ 18-1.3-102, 105, 106, 204, 205, 207, 208, etc.
IMPORTANT: It would be
unlawful to threaten criminal prosecution to collect an NSF check. That
would constitute an unfair debt collection practice in violation of the
FDCPA and CFDCPA, and more importantly, would be a sufficient factual basis to
support criminal prosecution for extortion (F-4). CRS 18-3-207
Regarding penalties, refer to link -
Class
4 Felony.
Although it is a crime to threaten prosecution,
absent prior threat, it is not a
crime to actually refer the NSF check to the
DA
Office for prosecution or directly file a criminal complaint.
Prosecution remedy remains available.
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Information regarding replevin (property recovery) and
liens - including lien foreclosure.
Creditor must know the debtor's
whereabouts. If unknown,
skip
tracing may be required. |
Replevin is a two-bit legal word, but has a specific legal meaning. When a
debtor is in possession of personal property against which a creditor claims
ownership interest (usually a security interest), replevin lies. This is a
means to procure a court order for possession, which may be involuntarily
enforced by the sheriff. In county court, the jurisdictional limit is
$10,000 value of the property. District court has no property value
limit.
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County
Court: refer to C.R.Civ.P. 404 |
District
Court: refer to C.R.Civ.P. 104 |
Generally, after possession is procured by court order, the property is sold in a commercially reasonable
fashion. Counsel would then review to eligibility & merits of lawsuit for deficiency balance (if any) against the
debtor. If the property sells for an amount in excess of the debt, the
balance would be returned to the debtor.
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| refer to the above links for
information - lawsuit or enforcement may be barred |
CRS 38-20-106. Lien for labor
Any mechanic or other person who makes, alters, repairs, or bestows labor upon any article of personal property, at the request of the owner of such personal property or his agent shall have a lien upon such property for the amount due for such labor done or material furnished and for all costs incurred in enforcing such lien.
This frequently applies to auto mechanics and tailors. The garageman who
repaired the motor vehicle or the tailor who made or repaired the garment may
hold possession of the property.
A mechanic who, under contract, bestows labor upon a chattel for its improvement is entitled to retain the possession thereof until he has been paid for his services, but performance of the contract is essential to the creation of the lien and the existence of the right of improvement.
Hillsburg v. Harrison, 2 Colo. App. 298, 30 P. 355 (1892). The
mechanic's performance of the contract is essential to creation of lien.
The lien provided in this section imports simply the right to hold and detain the property.
Wenz v. McBride, 20 Colo. 195, 36 P. 1105 (1894). However, an
employee of the labor provider is not invested with a possessory lien. Id.
A tailor, to whom material was furnished to be made into garments, is a mechanic entitled to hold possession of the garments until the price of labor which he has put on them for their betterment is paid by the employer if he fulfilled his contract.
Hillsburg v. Harrison, supra.
One claiming a lien upon a wagon for repairs must make it appear from an averment of facts that it was delivered to him for the purpose of such repairs.
Rohrer v. Ross, 53 Colo. 328, 125 P. 489 (1912). Proof of delivery for repairs
is required for a lien claim.
CRS 38-20-106.5. Motor vehicle repair garages
- restoration of liens. (paraphrased)
If the garageman released the vehicle upon payment by check which is returned
NSF - insufficent funds or otherwise dishonored, and if the maker, issuer, or
drawer fails, within twelve days after receiving notice from the motor vehicle
repair garage of nonpayment or dishonor, to pay the check, draft, or order, the
garageman is entitled to restoration of the lien.
In the event such motor vehicle repair garage has released the motor vehicle
upon an open account, the motor vehicle repair garage shall be entitled to
restoration of the lien if the total amount as agreed upon by the parties is
not paid when due as agreed upon by the parties and if the debtor fails,
within twelve days after receiving notice from the motor vehicle repair garage
of nonpayment, to pay the amount due.
Restoration of such lien shall entitle the motor vehicle repair garage to
regain possession of the motor vehicle. In regaining possession, the motor
vehicle repair garage may proceed without judicial process if this can be done
without breach of the peace or may proceed by action. (repossession)
Notice in writing shall be conclusively presumed to have been given when
deposited by registered or certified mail, return receipt requested and
postage prepaid, in the United States mail and addressed to such person at his
address as it appears on the invoice or such check, draft, or order or, in the
case of an open account, as it appears on the account records of the motor
vehicle repair garage. Any notice regarding an open account may only be given
subsequent to nonpayment.
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FORECLOSURE AND STATUTE OF LIMITATIONS |
If any charges for
which a lien is given have not been paid within thirty (30) days after the
charges become due and payable, the mechanic, innkeeper, agistor, or other
person to whom such lien is given may file a foreclosure action in the county or
district court. In the event that the lienholder does not foreclose the
lien by commencing a judicial action within sixty days and if, under CRS
38-20-106, within ninety days after charges become due and payable,
the lien shall terminate. Such period of limitation may be extended
by agreement between the parties for an additional period not to exceed thirty
days. If the contract between the owner and the lienholder provides for
installment or continuing payments, installments or continuing payments shall be
deemed to be due after default of any installment or payment or at the time the
final installment or payment is due and payable at the option of the lienholder.
CRS 38-20-107(1)
NON-COMPLIANCE PENALTY.
If the lienholder sells or otherwise disposes of the property of the owner
without substantially complying with this article, the owner is entitled to
recover from the lienholder the value of the property, but in no event less than
one hundred dollars, and reasonable attorney's fees. CRS 38-20-107(2)
Once
his lien has terminated, lienholder has no further right to withhold possession
of the lien property, and the owner of property subject to the lien is entitled
to recover for any damages incurred from unlawful retention. White v. Jackson,
41 Colo. App. 433, 586 P.2d 243 (1978).
IMPORTANT.
At the risk of being redundant, garagemen must timely foreclose the lien or
lose possessory right. Retention of possession in excess of the
statutory time without lien foreclosure may subject the garageman to monetary
damages. A prudent businessmen
does not invite a damage award. At the expiration of the lien
period, if foreclosure has not been commenced, the
appropriate remedy is to release the vehicle, then file suit for money damages.
Refer to debt
collection - litigation.
CRS 38-20-108 sets
forth the elements of the case which must be established to foreclose a
lien. Expedited hearing is provided by statute.
If the lien is foreclosed, the property would be sold in a commercially reasonable fashion, and
lawsuit for deficiency balance (if any) is then commenced against the
debtor. If the property sells for an amount in excess of the debt, the
balance would be returned to the debtor. CRS
38-20-109. sets forth the procedure for notice and sale upon judgment. CRS
38-20-113 expressly provides foreclosure and sale shall take away the right of action of the party to whom such lien is given to satisfy his judgment pursuant to law and the Colorado rules of civil procedure for his charges or for any residue thereof after sale of such property.
(deficiency balance)
Refer
to CRS 38-20-116 regarding definition of abandoned property and notice / sale
provisions.
Other are liens and rights to sell are granted under Colorado law.
Refer to the below statutes regarding
liens, notice foreclosure and sale.
Agistors (livestock) - CRS 38-20-201 et. seq.
Laundry and Dry Cleaning Services - CRS 38-21-101 et. seq.
Self-Service Storage Facilities - CRS
38-21.5-101 et. seq.
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OTHER
REPLEVIN & LIEN ISSUES
refer to link for information |
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Lawsuit or enforcement may be barred
Each lien statute referenced in this lien foreclosure webpage section contains specific
time limitations |
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ATTORNEY - CLIENT MATTERS |
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INDEPENDENT SERVICE
PROVIDERS |
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Where relevant, I utilize the services of independent professionals.
Rates of independent providers of professional services change periodically
and billings are not controlled by counsel.
If retained by counsel as an agent of the attorney, such independent service
providers are bound by the attorney-client privilege. If retained
privately by the client, no such agency or confidentiality exists.
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COLORADO DEBT COLLECTION
DO I NEED AN ATTORNEY? |
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Do I need an attorney?
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If you are visiting this website, it may be time to loosen the pocket book and
hire a collection attorney.
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General
Collection Matters
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Most
businesses turn to counsel because they have insufficient time or or
knowledge to collect accounts receivable or enforce a lien. You need not retain my services, but hire
counsel if you have been unsuccessful collecting monies due to your
business..
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Litigation
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Obtaining a judgment is the
first step, however that piece of paper can't be deposited in a bank
account. The judgment must be enforced and satisfied. Most
businesses turn to counsel because they have insufficient time or are
unable to enforce. You need not retain my services, but hire
counsel if you have been unsuccessful in collecting accounts
receivable..
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NSF
Checks
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The above self help collection tips may
be all a creditor needs to convert an NSF check into a cashier's check
without attorney's fees or costs.
If not,
businesses turn to counsel because they have insufficient time or
expertise to enforce. If a creditor even
contemplates referring the check to counsel for collection, do not commence
self help remedies. You need not retain my services, but
retain a collection attorney to proceed with lawful enforcement..
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Replevin
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Once a demand for possession
of personal property has been neglected or denied, a creditor can not break and
enter to obtain possession - that would constitute felony
burglary. If self help voluntary repossession or repossession from
a public place can not be affected without breach of the peace, the only recourse is to obtain a replevin order, secure
the sheriff's assistance with involuntary possession, sell the goods in
a commercially reasonable fashion and perhaps pursue a deficiency
judgment. You need not retain my services, but hire
counsel if you plan to engage in this course of action..
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Lien
for Labor
Automotive Mechanics
Garagemen
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Once a debtor has failed to make payment, the lien for labor must be
timely foreclosed or the vehicle returned. Better to act while you
have collateral which may be sold to pay the debt. You need not retain my services, but hire
counsel if you plan to engage in this course of action..
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Mechanic's
Lien
Materialman's Lien
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WEB
PAGE SECTION UNDERGOING REVISIONS
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At the time of the first visit, a prospective
client will be given a quote for fees and estimated costs. The quote will
be honored for a period of seven (7) days, after which quotes are subject to change
without notice if this office has not been retained. Fee quote and costs
trust deposit is dependent upon the facts and circumstances of each individual
case. Attorney fee options + litigation costs: 1)
contingency
fee - percentage of recovery 2)
hourly attorney fees only 3)
flat fee
for trial and enforcement 4) some combination thereof at client's discretion. Attorney determines
options to be offered. Litigation costs are not included in fees -
client's obligation. Attorney is a sole
practitioner with need to manage his caseload. Pending proposed client
acceptance and payment, retainer agreement proposals are subject to
withdrawal. Attorney reserves the right to decline any case. a)
first
consultation b)
attorney fees * costs * billings page
c) additional
information.
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POTENTIAL FEE
QUOTE
COLORADO DEBT
COLLECTION
CONTINGENCY FEE BILLING -
PERCENTAGE OF RECOVERY |
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Attorney generally offers hourly fees or a
contingency fee. Refer to below frequent trust deposit
request regarding
deposit for initial costs. This shall neither constitute
an offer, nor be construed as a binding estimate. |
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Contingency
Fee - Percentage of Total Amount Recovered or Collected |
| 25.00% |
up to and including default judgment or confession of judgment
and voluntary payment |
33.33%
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up to and including default judgment or confession of judgment
and garnishment, execution or levy
Note: this
includes attorney retained post judgment to enforce an existing judgment |
| 35.00% |
in the
event the case proceeds to pre-trial conference and voluntary payment,
garnishment, execution or levy |
| 40.00% |
in the
event the case proceeds to court or jury trial and voluntary payment,
garnishment, execution or levy |
| 50.00% |
in the
event the case is taken on review or appeal and voluntary payment, garnishment,
execution or levy |
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$5,000 Debt
Amount - Minimum Debt Accepted on Contingency Basis
unless attorney is
collecting multiple debts for a creditor - continuing collection lawsuit
representation relation with creditor |
if an account appears uncollectible
attorney would offer fees only
upon an
hourly
basis |
under some circumstances
attorney may offer a
flat
fee
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