Middletown Commercial Collection Lawyers
Running a successful, profitable business can be challenging when you have customers with outstanding debts. In today’s economy, a customer facing financial hardships might have a variety of reason for not making payments on time. However, there are ways to effectively collect outstanding debts before creditors become completely insolvent or are forced to declare bankruptcy. Sometimes, simply receiving a letter from a commercial collections lawyer is enough to compel payment. The key is to act swiftly in order to protect your investment and your legal right to receive payment.
When collection efforts need to be made, there are steps you can take which will make the process more productive and get your debts paid in a more timely fashion. The following tips will help you stay on top of your customers until their bills are paid:
- Do not harass customers. Instead, let them know in a professional way that you pay close attention to your company’s financial matters. Do not leave multiple phone messages per day. Never leave threatening or insulting messages, as this can sabotage your efforts to get paid.
- Be direct, listen, but do not get personal. Keep your calls brief and to the point. Do not make the debtor feel that his or her failure to pay is a reflection of them as a person. Be clear about the urgency of the situation.
- Get creative. If the customer is truly unable to pay, see if you can come up with an amount that the customer can comfortably pay each month. Alternatively, you may want to consider extending the payment deadline if the customer agrees to a revised payment schedule. Call the customer before the next payment is due as a reminder and to ensure that he or she is respecting the new agreement.
- Write demand letters. In addition to phone calls, follow up with letters that remind the customer of the growing intensity of the financial situation. Save copies of all correspondences in case the matter gets turned over to a collection attorney.
- Set reasonable deadlines. If the customer is not making payments or responding in a timely fashion, set a reasonable deadline for response in writing, such as fourteen (14) days, after which the matter will be immediately referred to legal counsel. If the customer does not respond within that deadline, immediately refer the matter to legal counsel as promised. This will show the customer that your demand is serious and that you intent to follow through and take immediate action to collect the balance. Otherwise, the customer will not take you seriously and hollow threats could actually make the matter worse.
- Offer a one-time discount: If you have a large account that has been unpaid for an extended period of time, consider offing a one-time discount. This can help resolve the matter and help to avoid non-payment of the debt.
- Avoid collections agencies and hire a skilled debt collections attorney. Most collection agencies are relatively ineffective at collecting debts because they are simply write letter and make phone calls. They generally do not have the ability to sue the debtor because they do not have collection attorneys on staff. For this reason, debtors do not always take collection agencies seriously. Further, collection agencies generally refer their collection matters to outside attorneys and upcharge their clients significantly for these referrals. The best place to turn for advice on debt collections is a skilled debt collections attorney. You can get friendly, professional tips from a debt collection lawyer that will help you collect your debts and who has the ability to sue the debtor and bring maximum leverage without excessive mark ups and referral fees.
- Negotiate a fee arrangement that works for you. Explain the circumstances to your prospective collections attorney and explain your budgetary needs. Depending on the circumstances of the matter, the attorney may offer representation on an hourly basis, where you pay for each hour worked, or a contingent fee basis, where your attorney takes a percentage of the amount collected. For contingent fee arrangements, the fee may vary based on financial condition of the debtor and the likelihood of collecting the balance. Don’t forget about counterclaims. Sometimes, when you sue a debtor, the debtor may countersue and claim that your products and/or services were deficient. Generally, attorneys handle counterclaims separately on an hourly fee basis. Make sure to discuss the possibility of a counterclaim with your prospective debt collection attorney and discuss how the attorney will be compensated for defending these claims.
Our Middletown commercial collections lawyers have extensive experience working with customers to help manage their debt. Borrowers who owe money tend to employ some commonly used tactics for delaying their payments. By anticipating these tactics, we can prevent further debt from accumulating and focus on debt recovery.
Legal Process of Debt Collection
At McOmber & McOmber, we have a wide range of legal methods at our disposal to seek payment from debtors. We start by explaining that voluntary payment of a debt is a much better scenario than involuntary measures. We stress the importance of a binding contract and the potential legal outcomes of nonpayment. If communication does not work, we can take all the legal steps necessary to collect payment, including a loan collection lawsuit. This process includes the following steps:
- Send demand letter that notifies the borrower that you are pursuing legal action if payment is not received
- File a lawsuit
- File motions and conduct discovery in order to investigate why the borrower is not paying
- If the customer does not have a solid defense, obtain judgment in your favor
- Initiate steps to enforce your judgment through wage garnishments, liens against real estate property, bank liens, asset seizures, and other post-judgment collection efforts – otherwise known as “post-judgment execution”