Collection Law F.A.Q.

How do you collect?

Collections generally happen in three phases: information gathering, initial communication, and repayment/further action. As part of our collections process, we attempt to locate the debtor, contact the debtor, and make payment arrangements. If the debtor is not amenable to repayment we may recommend further legal action in pursuit of a debt.

What can I claim in my collections case?

Generally speaking, you can claim any unpaid balances and any costs you incur in pursuit of collecting the unpaid balance. This can include case opening fees, fees for skip tracing, and even filing fees and fees for personal service. Some contracts allow for a reasonable attorney’s fee though state law prohibits collection of an attorney’s fee for certain types of debt.

The bottom line is that you should have an attorney review your existing lease or service agreement to make sure the agreement places you in the strongest possible position if collection efforts are needed.

What is the timeline for collections?

We do not have a way to predict with certainty how long the collections process will take for any one case. However, our office does send monthly updates regarding the status of your case. In these updates, we may advise further legal action in pursuit of repayment that may increase the odds of timely repayment.

Do you report to credit bureaus?

Our office does not do standard credit reporting. Instead, we prefer to file suit on the debt with the objective to obtain a money judgment.

What is a money judgment?

A money judgment is a court order legally establishing the debt. Once recorded, the judgment will preserve the debt for up to 10 years. A judgment also “opens the door” to other “tools” to assist in repayment, such as garnishments and liens.

How do I know if I’m “throwing good money after bad”?

The last thing we want to see is our clients hemorrhaging money chasing after a “bad debt”. This is often determined by how much screening was done at the beginning of the contract.

A call-centered based collections agency has a time and place. In some instances, it may be more cost effective to report the debt to a credit bureau and “sit on it” – although, if you do not get a recorded judgment, you may find yourself unable to collect on a debt once the statute of limitations is over. In other instances, particularly when further legal action is applicable for the debt, it may be worth the time and money invested to pursue that debt with a collections law firm.

Discerning “good debts” from “bad”, and how to protect yourself and your business from “bad debt” is a key component of the initial consultation with our office concerning collections.

What types of debts do you collect?

Our office can collect on any debt that results from a signed contractual agreement. We enjoy working with small businesses on tightening their receivables protocol and collecting on any remaining balances. Examples of business that have benefited from our services are: Home Repair/Remediation Companies,  Childcare Service Providers, and Construction/General Contractor Companies.

Our office also deals heavily in landlord tenant law, and a large portion of the collection cases received by our office are landlord tenant related. Unpaid rent is a specific area of collections, as state law stipulates what can and cannot be recuperated in these types of debts. Sending these types of debts to a collections law firm familiar with these regulations can save you time and headache!

Can you file a lien?

Filing a lien is a tedious process–intentionally made so by the state in an effort to prevent individuals from filing liens in error/bad faith. There are also penalties that can be assessed for erroneously encumbering property.  For this reason, our office requires an initial consultation and evaluation of the contract/service agreement before advising pursuit of a lien. While contractors do not need an attorney to file a lien we strongly recommend at least consulting with an attorney before beginning this process.

Can I garnish a debtor’s wages?

Wage garnishment requires knowledge of the debtor’s place of employment, and also the debtor’s location, as service must be perfected on both the business and the debtor. (Meaning, a process server must deliver papers to the business and the individual.)

Can I garnish a debtor’s bank account?

That’s what we’re here to help with! Garnishment of a bank account requires that service is perfected on the bank and the debtor. An account number is required for garnishment of a bank account. However, if suit is filed this is information that may be obtained through a creditor’s subpoena.

Who do I contact for more information?

You can contact our office at collections@sarahtaggart.com or at (256) 562 – 1999 to schedule a consultation with the attorney.