Use this debt collection guide to build a clear demand letter for Colorado Springs.
Colorado Springs Debt Collection Guide: Recovering Money Owed to You
When someone owes you money in Colorado Springs and refuses to pay, the frustration can be overwhelming. Whether it is a personal loan to a friend or family member, an unpaid invoice for services rendered, or money owed from a business transaction, you have legal options to recover what is rightfully yours. This comprehensive guide is designed specifically for Colorado Springs residents and El Paso County creditors who need to collect outstanding debts through formal demand letters and, if necessary, legal action. Understanding Colorado's debt collection laws, the procedures specific to El Paso County courts, and the most effective strategies for compelling payment will significantly increase your chances of success. From drafting a compelling demand letter to navigating small claims court at the El Paso County Combined Courts, this resource provides the practical knowledge you need to take action. We will cover Colorado's specific statutes governing debt collection, the evidence you need to document your claim, critical deadlines you must meet, and common mistakes that can derail your collection efforts. Whether you are owed a few hundred dollars or several thousand, this guide will help you pursue your claim methodically and effectively within the legal framework that governs debt collection in Colorado Springs and throughout El Paso County.
Colorado Debt Collection Laws: Understanding Your Legal Rights as a Creditor
Colorado law provides creditors with various tools to collect debts, but it also imposes certain requirements and limitations. Understanding this legal framework is essential for successfully recovering money owed to you in Colorado Springs.
Statute of Limitations for Debt Collection: Under Colorado law, the statute of limitations for bringing a lawsuit to collect a debt depends on the type of debt. For written contracts, including promissory notes, the statute of limitations is six years under C.R.S. Section 13-80-103.5. For oral agreements and open accounts, the limitation period is also six years. This means you must file a lawsuit within six years from the date the debt became due or the last payment was made, whichever is later.
Pre-Judgment Interest: Colorado allows creditors to charge interest on unpaid debts. If your contract specifies an interest rate, that rate applies. If no rate was specified, Colorado law allows prejudgment interest at the rate of 8% per annum under C.R.S. Section 5-12-101. This interest can significantly increase the amount you recover.
Demand Letters as a Prerequisite: While not always legally required, sending a formal demand letter before filing a lawsuit is considered best practice in Colorado. It demonstrates good faith, creates a paper trail, and often results in payment without the need for court action.
Small Claims Court in El Paso County: For debts up to $7,500, the El Paso County Small Claims Court provides a streamlined process for debt collection. Located at 270 S. Tejon Street in Colorado Springs, small claims court does not require an attorney, has simplified procedures, and typically resolves cases faster than regular civil court. Filing fees range from approximately $31 to $55 depending on the amount claimed.
County Court Jurisdiction: For claims between $7,500 and $25,000, El Paso County Court has jurisdiction. For claims exceeding $25,000, the El Paso County District Court handles the matter.
Garnishment and Collection: Once you obtain a judgment in Colorado, you have various collection tools available. Under C.R.S. Section 13-54.5-101, you can garnish wages, with certain limitations protecting a portion of the debtor's earnings. You can also pursue bank account garnishment, liens on real property, and seizure of personal property through the sheriff's office.
Colorado Consumer Protection Act: While this primarily protects debtors from abusive collection practices, creditors should be aware that certain aggressive tactics can result in liability. Harassment, false statements, and unfair practices are prohibited.
Step-by-Step Guide to Collecting Debts in Colorado Springs
Essential Evidence for Debt Collection Claims in Colorado Springs
Building a strong debt collection case requires thorough documentation. The evidence you gather will determine whether you can successfully recover the money owed to you in El Paso County courts.
Written Agreements and Contracts: The strongest evidence for any debt collection case is a written agreement. This includes formal contracts, promissory notes, loan agreements, invoices, and any documents showing the debtor agreed to pay. Even informal written communications like emails or text messages acknowledging the debt are valuable.
Payment History: Document all payments made on the debt. Bank statements, cancelled checks, payment receipts, and electronic transfer records show the original debt existed and establish the remaining balance. A clear payment history also helps demonstrate when the statute of limitations began running.
Communication Records: Save all correspondence with the debtor regarding the debt. This includes emails, text messages, letters, and notes from phone conversations. Communications where the debtor acknowledges owing the money or promises to pay are particularly valuable and can reset the statute of limitations in some cases.
Demand Letter and Proof of Delivery: Your demand letter and the certified mail receipt showing delivery are critical evidence. They demonstrate you gave the debtor a reasonable opportunity to pay before resorting to legal action, which courts view favorably.
Interest Calculations: If claiming interest, prepare a clear calculation showing the interest rate applied, the period over which interest accrued, and the total interest amount. Reference your contract terms or C.R.S. Section 5-12-101 for the statutory rate.
Witness Information: If anyone witnessed the transaction, the loan being made, or the debtor promising to pay, obtain their contact information. Witness testimony can corroborate your claim.
Photographic or Video Evidence: If the debt relates to goods delivered or work performed, photographs or videos documenting what was provided can support your claim.
Damages Documentation: If you incurred costs due to non-payment, such as returned check fees or collection costs, document these with receipts and bank statements.
Business Records: If you are a business collecting from a customer, maintain complete business records including invoices, delivery receipts, work orders, and customer account statements. These records are generally admissible as business records under Colorado evidence rules.
Critical Deadlines for Debt Collection in Colorado Springs
Understanding and adhering to deadlines is essential for successful debt collection in Colorado. Missing key dates can eliminate your ability to recover the money owed.
Statute of Limitations: The most critical deadline is the statute of limitations for filing a lawsuit. In Colorado, you have six years to sue on a written contract, promissory note, or open account under C.R.S. Section 13-80-103.5. This period begins when the debt becomes due or after the last payment, whichever is later. Once this deadline passes, the debt becomes uncollectible through the courts.
Demand Letter Response Period: When you send a demand letter, include a reasonable deadline for payment, typically 10 to 30 days. This deadline starts the clock for escalating to legal action.
Small Claims Court Filing Deadlines: When filing in El Paso County Small Claims Court, be aware that the court will schedule a hearing typically within 30 to 60 days of filing. You must be available to attend on the scheduled date.
Service of Process: After filing a lawsuit in Colorado, you must serve the defendant within 63 days for small claims cases. Failure to serve within this timeframe can result in dismissal of your case.
Post-Judgment Collection: Once you obtain a judgment, you have six years to collect under C.R.S. Section 13-52-102. The judgment can be renewed for additional six-year periods if collection is not complete.
Garnishment Deadlines: When pursuing wage garnishment, you must file the appropriate paperwork with the El Paso County court and serve the debtor's employer. The garnishment continues until the debt is satisfied or the employment ends.
Property Lien Recording: To create a lien on the debtor's real property, file your judgment with the El Paso County Clerk and Recorder promptly after obtaining it. The lien will attach to any real property the debtor owns in the county.
Bankruptcy Stay: If the debtor files for bankruptcy, all collection efforts must immediately stop. Any actions taken after a bankruptcy filing can result in sanctions against you.
Appeal Deadlines: If you lose your case and want to appeal, you typically have 14 days to file an appeal from small claims court and 49 days from county or district court.
Common Mistakes to Avoid When Collecting Debts in Colorado Springs
Successful debt collection requires avoiding pitfalls that can undermine your case or expose you to liability. Here are the most common mistakes creditors make in El Paso County.
Mistake 1: Waiting Too Long to Act. The statute of limitations is six years in Colorado, but waiting too long makes collection harder. Evidence gets lost, witnesses forget details, and debtors may dispose of assets. Act promptly when debts become overdue.
Mistake 2: Failing to Document the Original Debt. Without clear evidence of the debt's existence, you cannot prove your case in court. Always get loan agreements in writing, keep copies of contracts, and maintain records of goods or services provided.
Mistake 3: Not Sending a Formal Demand Letter. Jumping straight to a lawsuit without first sending a demand letter can make you appear unreasonable to a judge and forfeits an opportunity for quick resolution. A demand letter often prompts payment without court involvement.
Mistake 4: Using Improper Collection Tactics. Harassment, threats, calling at unreasonable hours, contacting the debtor at work when asked not to, or making false statements can expose you to liability under Colorado and federal law. Keep all communications professional and factual.
Mistake 5: Filing in the Wrong Court. Understanding jurisdictional limits is crucial. Filing a $10,000 claim in small claims court (limited to $7,500) will result in either dismissal or waiver of the excess amount. Know the limits for El Paso County Small Claims Court, County Court, and District Court.
Mistake 6: Improper Service of Process. Failing to properly serve the debtor with lawsuit papers can result in dismissal. Use the El Paso County Sheriff, a licensed process server, or certified mail as allowed by Colorado rules.
Mistake 7: Missing Court Dates. If you file a lawsuit and fail to appear at the hearing, your case may be dismissed. Mark all court dates on your calendar and arrive early with all documentation.
Mistake 8: Accepting Partial Payment Without Documentation. If a debtor makes partial payments, document each payment in writing. Partial payments can affect the statute of limitations and should be properly credited against the balance.
Mistake 9: Failing to Collect After Winning. Obtaining a judgment is only half the battle. You must actively pursue collection through garnishment, liens, or asset seizure. A judgment does not automatically result in payment.
Mistake 10: Not Renewing Judgments. Colorado judgments expire after six years. If you have not collected the full amount, you must renew the judgment before it expires or lose your right to collect.
Frequently Asked Questions About Debt Collection in Colorado Springs
In Colorado, the statute of limitations for most debts, including written contracts and promissory notes, is six years under C.R.S. Section 13-80-103.5. This period typically begins when the debt becomes due or from the date of the last payment. After six years, the debt is considered time-barred and cannot be collected through the courts.
The small claims court in El Paso County can handle claims up to $7,500. This court is located at the El Paso County Combined Courts, 270 S. Tejon Street, Colorado Springs. Filing fees are lower than regular court, attorneys are not required, and cases are typically resolved faster.
Yes. If your contract specifies an interest rate, that rate applies. If no rate was agreed upon, Colorado law allows you to charge the statutory prejudgment interest rate of 8% per annum under C.R.S. Section 5-12-101.
After obtaining a court judgment, you can file a Writ of Continuing Garnishment with the El Paso County court. This is then served on the debtor's employer, who must withhold a portion of wages until the debt is paid. Colorado limits garnishment to 25% of disposable earnings or the amount exceeding 40 times minimum wage, whichever is less.
If the debtor does not respond to your demand letter within the specified timeframe, your next step is to file a lawsuit in the appropriate El Paso County court. For debts up to $7,500, use small claims court. For larger amounts, file in county or district court.
Court costs are typically added to the judgment. Attorney fees are generally only recoverable if your original contract included a provision allowing recovery of attorney fees, or in specific situations provided by statute.
If the debtor files for bankruptcy, you must immediately stop all collection efforts due to the automatic stay. You will need to file a proof of claim with the bankruptcy court and may recover some or all of your debt depending on the type of bankruptcy and available assets.
Realistic Settlement Expectations for Debt Collection in Colorado Springs
When pursuing debt collection in Colorado Springs, understanding what outcomes are realistic will help you make strategic decisions about how to proceed.
Full Payment: In the best-case scenario, the debtor pays the full amount owed including principal and interest after receiving your demand letter or before a court judgment. This happens most often when the debtor has assets, a steady income, and wants to avoid the negative consequences of a lawsuit.
Negotiated Settlement: Many debt collection cases resolve through negotiation. Debtors often offer to pay a reduced amount in exchange for settling the debt entirely. A settlement of 70% to 90% of the total owed is often reasonable, especially if it saves you the time and expense of litigation. Consider accepting less for immediate payment rather than pursuing a judgment that may be difficult to collect.
Payment Plans: If the debtor cannot pay in full but has regular income, a payment plan may be the most practical resolution. Document any payment plan in writing and include consequences for missed payments.
Court Judgment: If the debtor refuses to pay or negotiate, you may need to obtain a court judgment. In El Paso County Small Claims Court, most cases are heard within 30 to 60 days of filing. A judgment confirms the debt legally and enables collection tools like garnishment and liens.
Uncollectible Debts: Sometimes debts are uncollectible despite your best efforts. If the debtor has no income, no assets, and files for bankruptcy, you may recover little or nothing. Knowing when to cut your losses is important.
Factors Affecting Outcome: The likelihood of collection depends on the strength of your documentation, the debtor's financial situation, whether the debtor owns property in El Paso County, the debtor's employment status, and whether the statute of limitations has been satisfied.
Colorado Springs Debt Collection Resources and Contacts
The following resources are available to assist with debt collection in Colorado Springs and El Paso County.
El Paso County Combined Courts: 270 S. Tejon Street, Colorado Springs, CO 80903. Phone: (719) 452-5000. This is where you file small claims cases (up to $7,500), county court cases ($7,500 to $25,000), and district court cases (over $25,000). Court hours are typically 8:00 AM to 5:00 PM, Monday through Friday.
El Paso County Small Claims Division: Same location as Combined Courts. Small claims court provides a simplified, attorney-optional process for claims up to $7,500. Filing fees range from approximately $31 to $55 depending on the claim amount.
El Paso County Sheriff Civil Unit: 27 E. Vermijo Avenue, Colorado Springs, CO 80903. Phone: (719) 520-7100. The Sheriff's Office handles service of process for lawsuits, execution of writs for property seizure, and wage garnishment service to employers.
El Paso County Clerk and Recorder: 1675 W. Garden of the Gods Road, Suite 2130, Colorado Springs, CO 80907. Phone: (719) 520-6200. File judgment liens against real property here to secure your claim against any property the debtor owns in El Paso County.
Colorado Bar Association Lawyer Referral Service: Phone: (303) 860-1115. Can provide referrals to collections attorneys in the Colorado Springs area.
Pikes Peak Regional District Court Self-Help Center: Located at the El Paso County courthouse, this resource can help with procedural questions for those representing themselves.
Colorado Judicial Branch Self-Help Resources: The Colorado courts website provides forms and instructions for small claims cases, garnishments, and other collection procedures. Access at www.courts.state.co.us.
Better Business Bureau of Southern Colorado: 25 N. Wahsatch Avenue, Colorado Springs, CO 80903. Phone: (719) 636-1155. While primarily for consumer complaints, the BBB can sometimes assist with business disputes.
Colorado Attorney General Consumer Protection: Phone: (800) 222-4444. Can provide information about collection practices and debtor rights.
The Debt Collection Playbook
Proof is Power
Contracts, invoices, texts, emails… gather all evidence of the debt.
Time is Your Ally (and Their Enemy)
Interest accrues. Late fees may apply. The longer they wait, the more they may owe.
Track Every Penny
Principal, interest, late fees… don't miss a dollar.
The Debtor's Options
Many states allow you to recover collection costs, including attorney fees in some cases. Know your rights.
Colorado Debt Collection Laws
Applicable Laws
- FDCPA
- Colorado Fair Debt Collection Practices Act - CRS § 5-16
Small Claims Limit
$7,500
Consumer Protection Agency
Colorado AG / CFPB
Collection Combat FAQ
When should I send a demand letter?
After the second broken payment promise. Don't let them string you along indefinitely.
What if they ignore my demand?
Small claims court is your next step. The filing fee is often recoverable, and you don't need a lawyer.
How do I prove they owe me money?
Contracts, invoices, text messages, emails, bank transfers, promissory notes, or witness statements all help prove the debt.
Can I charge interest?
Yes, if your contract includes interest terms. Even without a contract, many states allow pre-judgment interest on debts.
What about collection costs?
Many contracts allow recovery of collection costs and attorney fees. Check your agreement and state law.
Is there a time limit to collect?
Yes. Statutes of limitation vary by state and debt type, typically 3-6 years. File suit before the deadline expires.
What if they claim they already paid?
Demand proof. Bank records, cancelled checks, or receipts should show payment. If they can't prove it, they still owe you.
About FreeDemandLetter
FreeDemandLetter provides free, AI-powered demand letter generation with location-specific legal citations. Our content is reviewed by subject matter specialists and regularly updated to reflect current laws. We help thousands of people resolve disputes effectively—but we're not lawyers, and this isn't legal advice. For complex situations, consult a licensed attorney in your jurisdiction.