As a business, you might find yourself in the position of having customers who owe you money for products or services you provided them. As the creditor for debt that’s owed to you, you have rights to collections and assets recovery, but you should understand what legal options you can take to recover funds that you’re owed.
COLLECTION OF DEBT
If you don’t feel like you’re able to get the money you’re owed on your own by contacting a debtor directly, then you’ll probably move on to debt collection through other means. One common method is to enlist the aid of a debt collections agency, an organization that will usually collect a percentage of the debt plus expenses after a successful collection. However, you need to understand the regulations that are put in place by the Fair Debt Collection Practices Act and which apply to debt collections agencies.
If you decide to forego debt collections agencies or have already tried it and came up empty-handed, then you might need to go to court. Suing over collections and assets recovery as a creditor is expensive, but it’s sometimes the only way to see your rights as a creditor enforced. In extreme instances, you can actually receive the debtor’s property prior to the court’s decision on the matter. Other possibilities include replevin action and attachment, which allow the creditor to take back property if payments stop.
LAWSUITS AND LEIN:
An additional option is to sue the debtor. The result of a successful lawsuit is an enforcement judgment that enables you to claim property from the debtor until your debt is covered. This often involves the assistance of a local sheriff. On the other hand, you can opt for a lien, which is a legal claim to the property of a debtor. This is primarily useful for real estate, where you can have a lien against the debtor’s property equal to the judgment granted. Having a lien on the property could allow you to foreclose and reclaim your money that way.
Business Litigation Attorney
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