Q. What are Business/Commercial Collections?
Commercial collections involve the collection of past-due receivables owed to a
business by another business, or an individual for a business related debt. It
can be distinguished from consumer collections which involve collection of
debts owed by individuals that were incurred primarily for a personal, family
or household purpose.
Q. Is the Only Type of Collections Work Your Firm Handles
Our collections practice is generally focused on representation of business
creditors that are owed money by other businesses or individuals. We routinely
handle claims where the debtor is an individual where the basis of the claim is
business related, such as a personal guaranty, or some other basis for personal
liability of an individual in connection with a business debt.
We do not
currently accept volume retail collections (such as defaulted credit card debt)
involving consumer debtors. We will accept non-commercial claims where the
debtor is an individual depending on the nature of the claim, the documentation
or other evidence supporting the claim, the age of the claim, its value, and
our evaluation of its ability to be collected.
Q. What is the Difference between a Collection
Agency and an Attorney?
A collection agency sends a series of dunning letters to a debtor and usually
combines its mail campaign with a series of phone calls. Many collection
agencies operate on a high volume basis and handle all claims that are referred
to them using a "cookie cutter" or "assembly line" approach
where each claim is handled the same way (regardless of the circumstances of
the debt or debtor involved).
attorney uses the law courts and legal process to collect the debt. Depending
upon the specifics of the case the legal strategy can be tailored accordingly.
Q. What are the Stages of Commercial Collections?
For each claim that is accepted for collections, the first stage in the
collection process is to investigate the debtor and its financial situation
(assets and liabilities). This is done by accessing a variety of public records
and private data sources available to us, including private subscription only
data bases to which we subscribe. Based on the results of the initial
investigation, a final demand letter may be sent to the debtor. We may combine
this with a phone call to the debtor or personal visit to the debtor's business
premises. In some
circumstances this step may be skipped entirely and a law suit will be
commenced immediately.The second
stage of the collections process is to file a lawsuit. This is a litigation to
collect the past due receivable. The goal
of commercial collections litigation is to obtain a judgment or settlement. A
collections case is not undertaken in the anticipation of contested litigation.
A collections case is one the debtor is not anticipated to raise any
substantial defenses, and typically is the type of case where creditor could
obtain summary judgment (judgment by motion prior to trial) based on the
underlying documents and a supporting affidavit.
appropriate instances the collections attorney will seek to obtain a prejudgment
remedy against the debtor, such as an attachment against assets of the debtor,
or an injunction to preserve the status quo or prevent fraudulent transfers of
judgment has been obtained the third stage of the collections process is
judgment enforcement. The collections attorney seeks to enforce the judgment
against assets of the judgment debtor and turn it into cash using a variety of
judgment enforcement tools permitted by law.
Q. What Tools are Available to an Attorney to Seek
to Enforce a Judgment?
There are a variety of legal tools that a collections attorney can use to seek
to enforce a judgment on behalf of a judgment creditor.
Arkansas a collections attorney can serve restraining notices and information
subpoenas upon banks holding or believed to hold accounts of the judgment
debtor, and upon third parties that owe the debtor money (such as the debtor's
customers or clients).
Arkansas a judgment debtor can be compelled to answer written questions under
oath or to participate in an oral examination under oath regarding the identity
and location of the debtor's assets. The sheriff or marshal can be instructed
to seize the debtor's bank accounts and execute and sell other assets, such as
business equipment, vehicles, and real estate, among others. There are
other devices that can be employed depending on the nature of the debtor's
Q. What is the Likelihood of Recovery on my Claim Turned
over for Commercial Collections?
The answer to this questions depends upon a number of factors including the age
and size of the receivable and what it is for, whether the debtor is still
engaged in business, whether the debtor has unencumbered assets, whether or not
the debtor is a defendant in other litigation, and whether there are prior
unsatisfied judgments against the debtor.
addition, the more information you are able to provide regarding the debtor,
such as where the debtor banks, or the debtor's primary customers or clients,
the better the chances of recovery.
This site and any information contained herein is intended for informational
purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any