High stakes American civil litigation takes years, but properly handled assessment collections usually end in payment within months. What pace should associations expect once a delinquency is turned over to association counsel for collection? Can associations help to speed assessment recovery?

Law firm collection for community associations follows strict timing rules. These include requirements of the Federal and Colorado Fair Debt Collection Practices Acts. If the collection goes as far as court, court rules, typically the Colorado Rules of County Court Civil Procedure, also govern. Other statutes, notably the federal Bankruptcy Act, can also affect collection speed.

This article deals only with collection on a homeowner’s personal obligation to an association. Foreclosing an association’s lien generally takes longer.

Once an association engages us, we verify the legal basis of the debt, the balance and the owner’s identity. Then a demand for payment letter is sent to the owner. Orten & Hindman typically sends the letter within two business days of receipt of the ledger. In some cases, the owner responds and pays in full soon after receiving the letter, or arranges to pay over time and the matter resolves in days or weeks. However, by law, the owner has 30 days to respond before the association can move forward with a lawsuit. Approximately 40% of the owners who receive a demand letter respond.

If the owner fails to respond or refuses to pay, a summons and complaint begins the county court lawsuit process. The summons requires the owner to appear in court at a certain date and time, the “Return Date,” typically about a month in the future. These documents are delivered to a private process server, for service on the owner at least ten days before the Return Date. Obtaining legally sufficient service may require repeated visits to the owner’s home or workplace or even a stake-out of the owner’s home. Typically, 70-90 days pass between receipt of the ledger (and sending the demand letter) and the Return Date. However, owners who actively avoid service or are out of state can stretch the process over several additional months.

Approximately 2/3 of owners who appear at the Return Date either pay in full or enter into a court approved agreement or stipulation, promising to pay over time or automatically have a judgment entered against them. If the owner appears and objects to the amount claimed owing, by filing an answer to the complaint, a trial is scheduled, typically 60-120 days later depending on the court's docket. Most often, though, owners who do not resolve their debt before the Return Date simply fail to appear and the court enters judgment against them by default.

Once a judgment is obtained, the post-judgment collection process adds 120-160 days to the process. The steps are the same whether judgment enters by default, default-on-stipulation or after trial.

The post-judgment process generally starts about 15-20 days after judgment is entered; written questions to locate the owner’s assets (bank accounts, wages, tenant rents), “Interrogatories,” are requested from the court. These must then be personally served on the owner, with all the potential delays of process service repeated. After service, the owner must answer within ten days or be found in contempt of court. Contempt proceedings require a written motion, submission to the court, approval from the court and process service yet again, and eventually can lead to a warrant issued for the owner’s arrest if the owner ignores the citation. The warrant can yield payment to the association when an arrested owner’s release bond is intercepted and ordered to be turned over to the association.

Once assets are located, whether from interrogatories, cancelled checks in association files or information from Board members, bank account funds and wages can be garnished, again only after service upon the bank or employer and also upon the owner.