When a homeowner stops paying assessments, the next logical step is sending the balance to collections. But what happens to collection efforts if the homeowner resides out of state?
When a homeowner lives outside of Colorado, continuing collection efforts can become expensive and complicated. Some states allow out-of-state collectors to make phone calls and send letters, but many do not. But phone calls and letters are often less effective than collecting using legal means such as garnishments after judgment.
Unfortunately, judgments issued by a Colorado Court can only garnish money or lien property contained within the borders of this state. Other states must recognize Colorado judgments, but a Colorado judgment is not valid in another state until it is filed with that state’s court and made into an order through a process called domestication. Also, the legal collection tools available to attorneys vary by state. We are lucky in Colorado to be able to garnish wages, garnish bank accounts, lien real property, and even execute against non-exempt personal property. Many other states severely limit legal collection efforts. For example, in Texas, attorneys cannot garnish wages. An attorney in Texas can garnish bank accounts, but the bank can charge up to $1500 to process the garnishment.
Unfortunately, you cannot stop a purchase in your community by an out-of-state resident. However, knowing your collection limitations can prevent you from incurring unnecessary fees proceeding with futile collection efforts.