Implementing an effective debt collection strategy for your company
Collection Attorney, Stephen Gebeloff is set to release his eBook to help companies with internal debt collection and external debt collection policies and procedures. The eBook is entitled “Collecting Account Receivables.” The eBook was written to help companies tighten up their internal collection procedures. The sub-title of the debt collection book is “Don’t Let Your Company’s Money Burn.”
Guide to Internal Debt Collection Procedures
The debt collection attorneys at our commercial collection law firm believe that if more companies were more proactive with their internal procedures relating to collecting their past due accounts, they would find that there would be a higher rate of recovery on accounts that they extend credit to.
The eBook discusses the differences between collection agencies and collection law firms. Using a commercial collection agency can be useful in some situations. However, credit managers should be mindful that a collection agency is not licensed to practice law. When using collection agencies, if the collection agency is unable to collect on an account, they then must send the file to a commercial collection law firm. The collection agency will charge your company a higher contingency fee as the collection agency will act as a middleman and want to retain a percentage of the contingency fee.
The eBook also discusses the debt collection process once a file is turned over to either a collection agency or debt collection law firm. Once a lawsuit is filed to attempt collection of past due accounts, the various scenarios are discussed. The e-Book gives an outline of the debt collection process. The collection attorneys at The Gebeloff Law Group are always happy to answer any questions your company may have. We will discuss the differences between commercial collection agencies, commercial collection law firms and how each may or may not be appropriate to help your company recover past due accounts.
Using a Florida Collection Agency or Florida Collection Agencies
Florida collection agencies continue to collect debt in Florida. A collection agency in Florida needs to register with the State of Florida to have a collection agency license. A Florida collection agency may be a good fit for company that has a high volume of low balance claims for collection that are too small to justify filing a debt collection law suit. Florida collection agencies typically send our collection letters and then use debt collectors to make debt collection phone calls from their Florida collection agency office.
Even though a Florida collection agency may hold a license to collect debt in Florida, there really is no oversight over the Florida collection agencies over what tactics they may employ or how effective they may be at collecting debt in Florida. More credit managers are recognizing that they no longer need to place their debt collection claims with Florida collection agencies. A Florida debt collection law firm offers the same services as a Florida collection agency. However, what is important to recognize is that Florida collection agencies do not hold a license to practice law.
Florida Debt Collection Agency
If a Florida collection agency want to suggest that a collection case needs to go to an attorney, the Florida collection agencies have to outsource the collection matter to a Florida collection attorney. The end result is the Florida collection agency has to charge you a higher contingent fee as the Florida collection agencies now have to act as a middle man and will charge a premium on top of what the Florida collection law firm charges.
Our Florida collection lawyers will be happy to discuss the difference between Florida collection agencies and Florida collection law firms. In some instances utilizing a Florida collection agency may be a good option. However, in most cases using a Florida debt collection law firm will prove to get better results as the debtor recognizes that using a Florida collection law firm over a Florida collection agency means that your company intends to use the Florida courts to help your company recover its money.
Our debt collection clients have been asking our debt collection law firm questions about collecting their past due accounts. There are common patterns in the debt collection cycle. We decided to begin putting together an e-book on debt collection to try and help our clients maximize their recovery of account receivables. The debt collection book will discuss internal company credit and collection policy and procedures as well as what to expect when an account is turned over to a debt collection attorney. Below are several paragraphs from the book. As we progress with written the book, we will post excerpts as they become available.
Consistent Company Credit and Collection Policies
The name of the game in any business whether it be large or small is cash flow. Without cash flow most businesses, unless they huge reserves set aside struggle. Being consistent with your companies credit and collection practices is essential to keeping the money earned from services your company has rendered or has invoiced for the product your company has provided.
It is important all the personal in your company are made aware of your company’s credit and collection policies. Customer retention should be the goal. However, there will become a time in any business where a debt becomes past due. At some point your company has to start to make a decision, is the customer having a temporary cash flow issue that a simple phone call may determine or is it becoming apparent that the customer no longer has the ability to pay or does has the ability to pay but, simply is ignoring demand for payment.
When it is apparent to your company that an acceptable repayment plan will not be established, the debtor simply will not pay or the debtor is in the process of liquidating, it is time for your company to get third party help to help collect the money that is due to your company for services rendered and/or goods sold and delivered.
The Importance of the Credit Application
The Credit Application is very often overlooked by many companies. Our debt collection law firm cannot stress the importance of having your customer provide complete and accurate information on the application. From this document you can gain insight on how creditworthy your customer is. The customer may not always be truthful about its financial status but, from a credit and collection standpoint what our collection law firm is looking for, if the account becomes delinquent, is there a valid address to serve the summons and complaint and to see if a legal entity is even identified.
Too many times we see our clients invoicing a company that does not even legally exist. You can verify the corporate charter of any business by going to the Department of State, Division of Corporations Website, in the State that your customer claims it is incorporated.
Debt collection law firm
The credit application should have a paragraph added to allow for the recovery of costs and collection fees in the event your company has to retain a debt collection law firm to assist with the recovery of an account receivable. Unless specifically stated in the credit application or allowed by state statute, recovering your costs and attorneys’ fees, if you do have to take a case to court. varies from State to State. In Florida, if the credit application, contract or a Florida Statute does not specify entitlement to attorneys’ fees, each party to the lawsuit would be responsible for paying their own costs and attorneys’ fees. For this reason we advise all of our clients to include a paragraph substantially similar to: “In the event (name of your company) has to pursue collection on past due invoices for services rendered and/or goods sold and delivered, (name of your company) shall be entitled to recover its costs of collection, court costs and reasonable attorneys’ fees.”
Personal Guarantee paragraphs should be added to the credit application. With so many businesses open today and closed tomorrow a personal guarantee will ensure there is still someone to pursue if your customer goes out of business and there are still past due invoices that due to your company. However, keep in mind, a personal guarantee is only as good as the individual guaranteeing the obligation. There are some customers whose officers will refuse to sign a personal guarantee. A business decision needs to be made whether or not to extend credit to. If your company is willing to take a risk by extending credit to a newly formed business do so with open eyes.
In sum, your company needs to make decisions on who to grant credit to. Use the information obtained in the credit application to make a prudent decision. But, perhaps if an officer is unwilling to sign a personal guarantee that should be a red flag that the officer of the company is not willing to personally back the obligation.
( C) Copyright, Stephen B. Gebeloff, P.A. June 2015
Marketing our Debt Collection Law Firm and Debt Recovery Services
Marketing our law practice is essential to ensure the continuing growth of our commercial debt collection practice. Our law firm is aware of the important role social media plays in getting our firm’s message across. It is why many other firms will go to services like https://nitreo.com/instagram-growth-service to boost their presence on other social media platforms like Instagram. Our objective is to engage not only our current commercial debt collection clients but, to reach new clients that are having issues collecting their account receivables.
Our debt collection attorneys have created a Blog to write current articles pertaining to debt collection. The Blog posts cover a variety of topics ranging from how to make demand on a debtor for payment prior to litigation, the litigation process, defenses a debtor may raise during a debt collection case, obtaining a judgment, how to collect on a Florida judgment and ways to possibly recover against third parties for the debt if there has been fraudulent activity.
Debt Recovery Law Firm
Our firm has a Facebook Page, Twitter Account, Google Plus Account and Linkeden Page. We use these pages to keep our commercial debt clients up to date and to also share information with others who may have a need for our debt collection services or know someone who does. Part of our marketing strategy of course is to be found by new clients who are looking for our debt recovery services.
Search Engine Optimization “SEO” is an important part of our marketing. Today clients looking for our Florida debt collection services or our Florida debt collection attorneys do not go to the Yellow Pages, most perform a Google Search. It is no secret that if our debt collection law firm is not found on the first page of Google, potential commercial collection clients will not find us. To help our debt collection firm be found on Google, our collection attorney recently enrolled in a SEO course offered by ScaleUP Academy.
The course was presented in ten (10) videos that showed our debt collection law firm simple steps to take and adjustments to make to our web pages. The course was easy to understand and even though we are a debt collection law firm and not web designers or computer programmers, we were able to follow along. We implemented most of the strategies suggested by ScaleUP Consulting. Our collection law firm is now showing up on the first page for Google searches for potential debt collection clients looking for our debt recovery services. We have noticed a significant increase in new debt collection client telephone calls coming into our debt recovery law firm.
How Fast Can Judgment Be Obtained in a Debt Collection Case
Our debt collection client’s frequently ask our collection attorneys-lawyers how long will it take to collect their companies past due account receivables. It is important to note that every debt collection case is unique. Below we will summarize what to expect when your account receivable manager places an account for debt collection with our law firm.
If after a debt collection lawsuit is filed by our collection law firm, the debtor files no responsive pleading to the complaint, twenty (20) days after the summons is served, default will be entered. Thereafter, our debt collection client simply has to execute an affidavit of proof and our collection lawyers-attorneys will prepare a Motion for Default Judgment. In this scenario Judgment can be obtained anywhere from thirty (30) to forty-five (45) days.
Debt Collection Case
If a debt collection case is disputed by a debtor, the timing of a debt collection case depends on the dollar amount of the account receivable. In Florida, if a debt collection account is under $15,000.00 that would put the account in the jurisdiction of the Florida County Court Judicial System. In Florida, debt collection cases filed in the County Court typically go to trial within four to six months after the debt collection case is filed. Debt collection cases filed by our debt collection law firm in Florida that have an account receivable above $15,000.00, put the account in the Jurisdiction of the Circuit Court. Cases in this jurisdiction typically take longer to go to trial than debt collection cases that are filed in the County Court.
As previously indicated, each debt collection case is different. Our collection attorneys-lawyers work with our clients to try and streamline the process and get the debt collection case to trial and secure a judgment as expeditiously as possible. Once a judgment is obtained by our debt collection law firm, our collection attorneys-lawyers and debt collection paralegals will then devise a strategy to then attempt to liquidate the judgement.
We encourage all account managers to call and speak to our collection attorney to devise a comprehensive debt collection strategy for all of their account receivables that have become delinquent. There are many studies that show the longer a creditor waits to take action on collecting past due accounts, the percentage of recovery drops over time.
CASHING A CHECK WITH A RESTRICTIVE ENDORSEMENT / IS THE CHECK NOW PAYMENT IN FULL
CALL OUR COLLECTION LAW FIRM TODAY AND SPEAK WITH OUR COLLECTION ATTORNEY TO DISCUSS
It is important for creditors to consult with a lawyer. Our collection law firm is frequently asked to answer the question can cashing a check with a restrictive endorsement “paid in full” mean that they have accepted the payment as full payment despite the fact there is still a balance due. This a complicated area and we urge our client’s to call our collection law firm and speak to our collection lawyer. Any writing affixed on a check or words contained in some form of document, i.e., email, letter, that refers to an accompanying check is considered a “restrictive endorsement.” Creditors should be versed on the effects of “restrictive endorsements” as cashing a check with a restrictive endorsement could lead to the conclusion that the debtor has achieved an “accord and satisfaction,” payment in full. At our debt collection law firm, we receive many inquiries from our debt collection clients on whether or not to cash a check tendered by a debtor with a restrictive endorsement. Our collection attorneys always err on the side of caution and advise our debt collection clients not to cash the checks.
Restrictive Endorsements on Checks
Our collection law firm also receives inquiries to our collection lawyers about situations where a check is sent to a lock box and cashed. Fortunately for our debt collection clients, all states, have adopted the recent revision of the Uniform Commercial Code, Article 3, Section 311 (UCC3-311), which is commonly referred to as “Safe Harbor.” The Safe Harbor principal is applicable to payments received in a system that is serviced by a third party (such as a bank lock box or a post office box). Typically, this is the creditor’s banking institution whose lock box is serviced by banking personnel lacking the knowledge and expertise to make an informed decision relative to restricted endorsements. The Florida statute is found below but generally a creditor should look to state statute to find a similar Safe Harbor provision such as UCC 3-311. The UCC 3-311 specifies within 90 days of depositing restricted payment from a buyer, the seller can send one of their checks back to the buyer in the same amount of the restricted check and preserve the creditor/seller’s legal remedies. The creditor should make sure the “reimbursement” check should be sent back via some mode requiring proof of attempted delivery. Our collection clients should note the buyer/debtor need not cash the “reimbursement check;” as the creditor/seller’s right to proceed with litigation is preserved by the act of sending back the amount originally submitted under endorsement text or provisions. Our collection lawyers also counsel our debt collection clients to make sure they put specific language in their contracts and or credit applications pertaining to where and to whom payment should be sent. This is important because the Uniform Commercial Code provides that if a credit grantor is made aware of a dispute prior to any type of final payment being made the creditor’s claim for an overdue balance is not discharged if within a reasonable time before tender the creditor stipulates that a restricted instrument (restricted check) must be sent to a designated person, office or place. If those instructions are not followed, then creditor remedies are available.
Florida Statute Section 673.3111 Accord and satisfaction by use of instrument, provides: (1) If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply. (2) Unless subsection (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim. (3) Subject to subsection (4), a claim is not discharged under subsection (2) if either paragraph (a) or paragraph (b) applies: (a) The claimant, if an organization, proves that: 1. Within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place; and 2. The instrument or accompanying communication was not received by that designated person, office, or place. (b) The claimant, whether or not an organization, proves that, within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with subparagraph (a) 1. (4) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.
Our debt collection clients are often confused on what they should do with a check with a restrictive endorsement ” Paid in Full.” Please feel free to contact our debt collection lawyers at our debt recovery law firm. Our collection attorneys are always willing to discuss a collection strategy to help our client’s minimize risk and bad debt.
USING A DEBT COLLECTION LAW FIRM TO ASSIST COLLECT PAST DUE RECEIVABLES
Our collection lawyers recognize, in this tough economy, many businesses are struggling with cash flow. Our collection law firm can assist a company in collecting their past due collection accounts. Our collection attorneys are sensitive to the tough economy and work with our collection clients to implement a debt collection strategy. Not every debt collection matter is the same. Each one of your customers is unique and our collection lawyers work with you to identify the specific issues presented. Our collection attorneys work with you to identify what may have put your customer in a situation where they are now behind in paying their past due invoices. Our collection law firm will not only send a collection demand letter but, our collection attorneys will investigate the customers corporate status, attempt to speak with the owners of the company and then make a recommendation as to the best debt collection strategy for your company. Sometimes we may suggest that your company may better be suited using a debt collection agency. Our collection attorneys will ask you specific questions that will help you decide whether to use a collection agency or a collection law firm.
Palm Beach County Court House
If your company has many low balance past due accounts, a collection agency may be ideal. However, a collection agency cannot give legal advice and a debt collection agency cannot file a law suit if necessary. Not every debt recovery matter needs a collection lawsuit. That is why it is important to speak to our collection attorneys and decide together a debt recovery strategy. Sometimes it makes sense to place some of your past due accounts with our collection law firm and other accounts with a collection agency. Call our collection law firm and ask to speak to one of our collection attorneys. Together, we will devise a debt collection strategy that is just right for your company’s past due accounts.
When considering strategies to most effectively be able to collect money on a debt owed to your company, an analysis of the corporate structure is vital. The State Department of Corporations give valuable information on how the corporate debtor is structured. Many times in a debt collection case, our collection attorneys find that the debtor’s corporation has been administratively dissolved. That does not necessarily mean the debtor company is still not operating. In that case our collection law firm is able to bring your company’s debt collection lawsuit against the officers of the company in an individual capacity. Our collection lawyer would draft the caption of the debt collection lawsuit …John Johns t/a (trading as) Bob’s Debtor Company.
Our collection law firm believes that keeping pressure on the officers of an entity is a very effective tool in getting your debt collection matter resolved. Most companies set up a corporate structure to shield the officers from personal liability. However, if the company is sloppy and does not keep up its corporate charter, individual liability for the debt may be imposed by the Courts.
Miami Dade County Court House
Our collection law firm’s collection attorneys also look for evidence that a corporate debtor may have been severely under-capitalized. Our debt collection law firm has brought suit against officers of a company for not having adequate working capital. The theory being that the officers knew or should have known that the debtor entity did not have the financial capability to pay for the goods or services.
If you would like to discuss your company’s debt collection and or debt recovery strategies with our debt collection attorney, feel free to call our debt collection law firm. We would be happy to devise a debt collection and recovery strategy that is custom tailored to your company’s debt collection needs. EMAIL US TODAY
Collection Attorney Stephen Gebeloff was chosen to be the team-leader for the Palm Beach Chapter of Team in Training. All money raised by the debt collection lawyer and his debt recovery law firm will be used to fund research and help patients currently who are currently treating.
Besides the day to day duties of running his debt collection practice, Gebeloff enjoys helping others achieve their fitness goals and also collect money for the Leukemia Society in support of their mission. This season, he will be leading and training with the Nike San Fransisco Half Marathon and the Marine Core Marathon teams.
To help collection attorney Gebeloff support Leukemia Research and fund patient services, please consider making a tax free donation to his fundraising page. Of course, if there are any questions pertaining to debt collection, domesticating judgments or generally questions about the collection industry, please feel free to contact our debt collection law firm to discuss.
When collecting debt, time is critical to maximizing your recovery of your past due account receivables. As a collection law firm, we see time and time again our clients waiting on their customers repeated promises for payment. Our collection lawyers have spoken to hundreds of debtors. Our collection attorneys know when a debtor is truly experiencing financial issues that are not allowing the debtor to make payment. Our collection lawyers also know when a debtor simply is stalling and / or simply has no intention of paying for the goods or services your company has provided.
Our collection law firm strives to quickly advise our debt collection clients the dynamics surrounding each debt collection case. Our collection attorneys believe that our clients when they engage a debt recovery firm should have all the facts surrounding a debt collection matter so they can make informed business decisions prior to spending additional time and resources in attempting to recover their money.
Palm Beach Court House
Our debt collection firm and attorneys have the tools to assist our clients to paint a picture of a debtor’s situation. Our collection lawyers want to provide our clients with the information they need. Not every debt collection case can be recovered. But, our debt recovery firm wants to at least let our collection law clients know that we leave no stone unturned in at least presenting scenarios that effect the collectability of our clients past due accounts.
At our collection firm, one of our debt collection attorneys would be happy to discuss your particular debt recovery case. Our collection lawyer will devise a debt collection strategy that is tailored to your company’s particular debt recovery needs. Please call our collection attorney or email us the particulars of your debt collection case.
