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Return to Christian-Attorney.net Return to Christian Business Lawyer COLLECTION ATTORNEY Do
you have inactive
collection matters? Have your collection efforts been
ineffective on a particular matter? If you answered "yes" to
any of these questions, it is probably time to change course
and embark upon a more pro-active approach. You have a number of
alternatives available. Alternative
A.
Retain an attorney: You may
retain an
attorney
to seek to collect the debt. By hiring an attorney, the
attorney can seek to collect out of court. If that is not
fruitful, then the attorney can file lawsuit in a Superior Court.
Alternatively, under certain circumstances, the retained
lawyer may, upon retention, elect to immediately file a lawsuit.
If you triumph in your suit
against the debtor,
the court ordered judgment will include:
1. The debt
amount the court determines you are owed;
2. Interest
(in amounts and rates permitted);
3. Court
Filing Fees;
4. Service
of Process costs;
5. Possibly
other statutory costs; and/or
6. Possibly
reasonable or statutory attorney's fees Will the debtor owe
your attorney's fees? Attorney's fees will not generally be
part of the
judgment unless you have a written agreement with
an attorney’s fees
clause, or you prevail on a “book
account.” Since the liability and
amount of damages are
uncontested in many collection matters, the debtor often does not file
a Answer
to Complaint. Therefore, the creditor (you) can obtain an
uncontested
default judgment. However, if the debtor elects to defend the
lawsuit,
your attorney’s fees may be greater. Even after a judgment is
obtained, the money
still has to be collected from the judgment debtor. However,
with a
judgment in place, there are powerful post-judgment remedies
available
(wage garnishment, bank levy, etc.). Alternative
B. Small Claims Court: You may file a small claims
lawsuit. However, the
maximum judgment amount you may obtain is $7,500.00. In small
claims
court, in most cases, no attorney may represent you. Rather,
you
represent yourself in court. You offer the evidence (documents and/or
testimony) to prove that a contract exists, and that you are owed a
certain sum
of money. Even if you obtain a small
claims judgment, the
defendant debtor may elect to appeal the decision which
causes the entire
matter will be heard a second time at the Superior Court.
However, in a
case where liability and the damage amount are undisputed, it is less
likely
that the judgment debtor will appeal the small claims ruling. The small claims court will
not collect the
judgment for you. Rather, the court will
issue orders (which you or an attorney prepare, file
and serve on the
defendant) to compel the defendant debtor to pay you. The law permits you to
represent yourself.
But, as the saying goes, "He who has himself for an attorney
has a
fool for a client." Nevertheless, some collection matters can
be
handled without an attorney by certain savy persons who can self learn
the
legal basics. Another option is to hire an lawyer a a legal
coach to
guide you through the process and, perhaps prepare some of the more
technical
documents. Legal coaches can be a cost-effective approach in
some cases,
though not necessarily as effective as full represenatation. Alternative
D. Write off the debt as a loss
on your taxes: You can choose to do
nothing. You
may confer with your tax professional to determine what manner
of tax
write-off you might be entitled to claim. Alternative E. Bad Check
Restitution. Many California counties Furthermore, you may seek to
have the district
attorney prosecute debtor who wrote the check without sufficient funds
under Penal
Code §470 or other sections. Some Courts
or judges may require the
debtor to pay restitution, that is, pay entire amount owed, in place of
actual criminal
prosecution and/or incarceration. Note: There
may be other alternatives beyond the ones mentioned in this article,
which,
under the right circumstances, might also be beneficial to you. April 4, 2007 Copyright
2007.
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