Written by attorney Adam M. Cain

Georgia Basic Debt Collection



The debt collection process begins here. While traditionally the creditor comes to the attorney’s office for an initial interview, this may also take place by telephone or letter. In any event, the creditor has come to the attorney seeking assistance in collecting a debt. This usually represents the first opportunity for the attorney to obtain information and begin pre-judgment planning. During this initial phase, there are several topics that should be covered. Review and obtain client’s documentation to determine what type of collection action you will be dealing with and be careful to evaluate the claim and obtain as much information as possible about the debtor. Documents to look for are any and all instructions that can support your client’s claim to collect monies owed which include:

1) Promissory notes;

2) Guarantees;

3) Checks still unsatisfied;

4) Credit agreements or applications;

5) Purchase orders;

6) Contracts; and

7) Invoices.

Question the client about possible counterclaims or defenses to an action.


In order to establish a fair and reasonable fee arrangement for the handling of a collection case, it is important to have as much of the information listed above as possible. You should consider your fee arrangement on a collection case after your initial consolation with your client taking into consideration the above. There are several different considerations that should be considered prior to setting fee arrangement and here are a few:

1) Collectability;

2) Size of claim;

3) Difficulty of case;

4) Prior relationship with client;

5) Prior knowledge and relationship with debtor.

6) Experience with similar types of claims.

With the above in mind there are several types of fee arrangements to consider in a collection case which are as follows:

1) Contingent. This is the most frequently used fee arrangement for debt collection matters. The attorney will receive a percentage of the recover and that percentage may differ in the same case, using a lower contingency in the matter can be collected without suit and a higher contingency if suit is necessary. That contingency may even increase in the event of an appeal

2) Hourly.

3) Flat Fee.

4) Combination. Consider arranging a fee as a combination of a retainer or flat fee or a retainer fee, plus a contingent fee.

After you and your client discuss and agree on the fee arrangement always confirm with an engagement letter signed by you and your client.


1.Determining the Correct Legal Entity. It is imperative to obtain the correct information regarding debtor’s legal composition. Not only will this assure that the suit is filed against the correct party, but it will also provide the necessary information to determine where the suit should be filed. Do not take the company’s name at face value because it is not at all unusual to find that a company name followed by “Inc." is not a corporation. Check the Secretary of State, review the claim documents provided to you by your client and also check the trade name registration in the county in which the debtor operates.

  1. Trade name. Real party at interest. Russell v. O’Donnell, 132 Ga. App. 294(1974).

  2. Statute of limitations.

a) Breach of any contract for sale: 4 years, (O.C.G.A. 11-2-725)

b) Contract, including breach of warranty or indemnity: 4 years, (O.C.G.A. 11- 22A-506)

c) Written contract: 6 years from when it becomes due and payable and the six (6) year period runs from the date of last payment. (O.C.G.A. 9-3-24)

d) Open account; implied promise or undertaking: 4 years, (O.C.G.A. 9-3-25).

e) Bonds or other instruments under seal, 20 years, (O.C.G.A. 9-3-23)

  1. Statute of frauds (unsigned purchase orders do not satisfy the statute of frauds), Entertainment Sales Co. v. S N K. Inc., 232 Ga. App 699 (1998).

  2. Venue.

a) Individual. Unless one of the other constitutional venue provisions described below applies, a civil case must be tried in the county in whichthe defendant resides. GA. CONST. Art. VI, II, Para. VI.

b. Corporations: The legislature has the authority to determine the venue of foreign and domestic corporations. A. CONST. Art. VI, II, Para. VI. For any domestic corporation or foreign corporation authorized to transact business in Georgia, the following statutory venue provisions apply:

c) In the county of the corporation's registered office, or in the county of the corporation's last named or principal office according to the Secretary of State's records

d) Contract Actions. In the county where the contract was made or is to be performed, if the corporation has an office and transacts business in that county;

e) Suit on Notes. In any suit against the maker and endorser of a note, or against the drawer, acceptor, and endorser of foreign or inland bills of exchange or like instruments, venue lies in the county of residence of the maker or acceptor. GA. CONST. Art. VI, II, Para. V.

  1. Attorney’s Fees. Prayer for attorney fees under O.C.G.A. § 13-6-11 necessary in complaint to get judgment for attorney’s fees under § 13-6- 11. Williams v. Binion, 227 Ga. 893. A request for attorney’s fees pursuant to O.C.G.A. § 13-6-11 makes suit for unliquidated sum. Oden vs. Legacy Ford, 222 Ga. App. 666.

  2. Alternative Dispute Resolution (“ADR"). Is a there a mandatory mediation or arbitration in its agreement with the adverse party or is there a forum court with mandatory ADR whose costs are passed on to a party which may require the adverse party to travel to your clients location.

  3. Invoice. You should always attach the invoice as an exhibit to the complaint because the pleadings should show the debt to be certain and ascertained (liquidated) for the purposes of default judgment, the debt was unliquidated) See Hazlett v. Womack,181 Ga. App. 25. After you determine who is liable and where the debtor resides, the type of action to file based on the type of debt owed, you must consider in which court to sue:

  4. Magistrate Court – There is a $15,000.00 jurisdiction limit; no jury trial, no discovery; no CPA;

  5. State Court - Great for summary judgment motion or bench trial but some counties do not have;

  6. Superior Court - Best to use only in conjunction with fraudulent transfer count, request for receiver, or a reclamation; and

  7. United States District Court - Diversity of jurisdiction plus minimum $75,000.00 jurisdiction.


If you are suing on account in volume for modest sums, consider filing a verified complaint, and then file a motion to dismiss an unverified Answer.


The Defendant has thirty (30) days to file an answer and an additional fifteen days to open default by paying cost into the registry of the court. Most courts require the plaintiff’s attorney to submit a Rule 15 Certificate as to service and proposed judgment forty-five (45) days after service in the event that the defendant fails to file a timely answer and a Motion for Default Judgment.


If you have filed suit in State, Superior or District Court it is Always send out Request to Produce on the opposing parting requesting information such as:

1) Communications between parties;

2) payment checks; notation of balance due on payment check is acknowledgment of liability. Garrett v. Lincoln Cemetery, 148 Ga. App. 744, 252 SE. 2d 650(1979);

3) adverse party’s account record;

4) any contract;

5) any writing to support any defenses; and

6) failure to comply with a discovery order can warrant dismissal of a pleading. Stokes v. Taco Bell Corporation, 229 App. 558.

If the Defendant fails to timely respond to discovery either by failing to respond to Interrogatories, Request to Produce, Request for Admissions or fails to attend a deposition, file a motion to compel and extreme sanctions pursuant to O.C.G.A. § 9-11-37 and request for the Defendant's Answer to be struck from the record and for a Default Judgment thereafter.


The key here is proper testimony to admit business records. A witness does not have to have personal knowledge of the correctness of the records or to have made the entry himself, but the witness must be familiar with the method of keeping the records. Hertz Corp. v. McCray, 198 Ga. App. 484, 402 S.E. 2d 298 (1991). Proof of attorney’s fees under O.C.G.A. §13-6-11 and §9-15-14 may require time records and some opinion evidence by persons actually familiar with work done. First Union Bank v. Davies-Elliott, Inc., 215 Ga. App. 498 (1994) ($52,000.00 attorney fee reversed as it was 1 1/2 actual damages awarded); Mitcham v. Blalock, 214 Ga. App. 29, 32 (1994) (right to cross-examine on value and need or alleged legal services). Carpet Transport, Inc. v. Kenneth Poley Interioi, 319 Ga. App.556, 466 SE 2d 70 (1995); Southern Medical v. Willis, 194 Ga. App. 773. What is a suit on account? Schiuter v. Perrie, 230 Ga. App. 776 (1998) and Sanders v. Continental CasüaltvCo., 226 Ga. App. 119 (1997).


Consent Judgment Agreement which should have some type of penalty if debtor fails to adhere to terms of the consent agreement.


Must separate principal, accrued pre-judgment interest, post-judgment interest, and attorney’s fees. It is always beneficial to draft a findings of fact and conclusions of law in your judgment, especially if there is fraud involved for possible non-dischargeability contention should the debtor later file bankruptcy.

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