Business Collection

 

Move quickly.  If our firm had to sum up our over two decades of business collection experience, it would be with those two words: move quickly.

Business collection, also known as commercial collection, is a remedy for the unfortunate situation where the creditor, a supplier of services, goods or money, has not been paid by the debtor. 

 

The legal definition of “insolvency” is a debtor which has not paid its bills within 90 days. Debtors which do not pay within 90 days may never be able to pay. 

Frequently, debtors that cannot meet their obligations will go out of business.  It is an established fact that over 90% of businesses fail within their first 10 years of operation. Also, every year, many mid-sized and even publicly traded companies cease operations.

 

Alarmingly, some businesses are set up to fail.  Certain “expenses” are really hidden dividends being siphoned away for the benefit of owners.  At some point, the debtor goes out of business, and the creditors are left with little or nothing.

 

The worst thing a creditor can do is ignore unpaid receivables.  In one case, because this firm filed an early lawsuit and litigated vigorously, the firm helped recover well over $1 million from a collapsing group of corporations and partnerships.  The debtor-group was in fact a business designed to fail, with “rent” being paid to related companies.  Another creditor, which was owed over $800,000 in unpaid bills, but did not file a timely lawsuit, recovered almost nothing.

 

Creditors should review every account over 90 days past due for possible assistance from collection counsel.  A debtor which does not pay its bills within 90 days has obtained a credit line, without security, from the creditor.

 

Hiring a lawyer does not necessarily mean filing a lawsuit.  Most of the firm’s collection matters are resolved without litigation.  Notable recoveries in pre-litigation collections include amounts of $850,000, $925,000, $700,000 and $1.24 million.  Security in some cases included entry into promissory notes with personal guarantees.

 

Significantly, the State of California allows creditors in breach of contract actions to file an application for a writ of attachment.  If granted, an attachment allows the creditor to seize assets, such as bank accounts or real property, before judgment.  In one case, the firm’s attorneys obtained an attachment order for almost $500,000 against a debtor’s house. 

 

By acting sooner rather than later to request assistance of counsel, a creditor can either speed collection or, perhaps, determine that an account should be closed, so that good money does not chase after bad.

 

If a creditor waits too long, the debtor will file for bankruptcy, leaving the creditor, along with others, quarreling over the leftovers. 

 

In business collection, he who hesitates, loses.  A creditor that wants a chance to collect instructs its lawyer to move quickly.

 

Please contact the firm to see how we can improve your collections.  The firm can be reached at (818) 660-2518 or at ndw@ndwlaw.com.

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Our firm works hard to collect unpaid bills, quickly.

If a creditor waits too long, the debtor will file for bankruptcy, leaving the creditor, along with others, quarreling over the leftovers. 

A creditor that wants a chance to collect instructs its law firm to move swiftly.  

Disclaimer: This is attorney advertising by Nathan D. Wirtschafter, Corp. This web site is designed for general information only. The information presented at this site should neither be construed to be formal legal advice nor the formation of a lawyer/client relationship. Nathan D. Wirtschafter, Corp. and Nathan D. Wirtschafter, Esq. are admitted to the practice of law in California.  Information on this website is neither a prediction nor a guarantee of the results in your dispute.  All cases are different. Contact us by phone at (818) 660-2518 or by email at ndw@ndwlaw.com.  Copyright 2020.  All rights reserved.