AGGRESSIVE DEBT COLLECTION IN ACTION

FRAMINGHAM---- A local electrical contractor who had always paid you, suddenly develops a 6,000 volt financial short circuit. Company "A," after receiving an earlier edition of this Newsletter, calls me.

Upon investigation, I learned that the debtor had recently transferred his property into a trust. This is a trick often used to avoid creditors. Within a few days of receiving the case, I sued. Besides seeking and obtaining an ex parte attachment of the debtor's bank account, I also obtained an ex parte special attachment of the debtor's interest in that property. This stopped the debtor from selling or refinancing that property to my client's detriment.

Eureka! The bank attachment hit a "live wire" catching more than $5,500.00. Due to the two attachments, within 90 days after suit my client recovered the shocking sum of $8,000.00.

FRAMINGHAM-- A commercial property owner, after paying all of Company "B's" requisitions, develops deadbeatitis on the fabled last payment for almost $6,000.00. Company "B" called me.

I appeared ex parte and obtained a bank attachment and personal property attachment. The Deputy Sheriff, armed with the personal property attachment convinced the debtor that calling me would be in its best interest. "How do I get rid of this sheriff," the debtor asked? "You could pay the bill," I suggested. The debtor said that it would pay the full amount due and owing the next day.

I told the debtor that I would ask the sheriff to leave but would send him back in two days if I did not receive payment.

Revived by the gospel of actually paying for what you receive, the debtor paid the full amount due and owing, including interest, costs and the sheriffs bill.

Sometimes, all that is necessary to obtain payment is a visit by your friendly neighborhood deputy sheriff armed with a writ of attachment authorizing seizure of personal property.

Framingham -- A borrower stopped paying its loan secured by a mortgage on his property. After months of failed collection attempts, the lender turned to me to foreclose on the mortgage.

As required by law, I properly followed the steps intended to protect soldiers and sailors from mortgage foreclosures and obtained the Land Court's blessing to commence the foreclosure sale. Perhaps by coincidence, the borrower finally started to realize the need for serious negotiations. To avoid a certain foreclosure sale, the debtor refinanced and paid his debt-- which was all my client and I really wanted. My client timely received all of its money --principal, interest, costs and very reasonable attorney's fees.

FRAMINGHAM -- A contractor ran up a large bill at a material supply house to the tune of almost $70,000.00. The contractor unfortunately could not carry that tune. My client called me.

Upon careful review of the situation, I concluded that filing a mechanic's lien was my client's best and most economical bet for getting paid. I immediately obtained a copy of the deed to the property where the contractor had used my client's materials to renovate an apartment building. Within days, I prepared the Notice of Contract and Statement of Account, two of the three steps necessary to create and enforce a mechanic's lien. I then promptly sued to perfect the lien (step three).

The timing of the lien was perfect. The owner was selling the renovated apartments as condominiums. After intensive negotiations with the owner and the bank's counsel, we agreed that my client would receive some of the sales proceeds from each unit in exchange for partial releases. Within forty days, my client received the full amount of its principal and interest.

Absent the mechanic's lien, the only music my client would have heard was the "deadbeat shuffle."

Now this does not always happen, but it could happen to you. Armed with solid paperwork, an aggressive competent collection attorney who knows how to collect debts is a valuable ally in the battle for control of your money.

FRAMINGHAM -- You receive a letter from an attorney or accountant stating that your debtor is closing its doors and can't pay you. Don't give up. My clients don't. They call me.

After receiving such a notice, my client decided not to just walk away from the $10,000.00 due to it from the debtor. It took action and hired me. I immediately sued and obtained an ex parte attachment on the deadbeat's bank account and its personal property. Contrary to the debtor's representations, it had money in the bank -- $11,000.00, specifically.

To attempt to avoid paying my client and its other creditors, the debtor made a general assignment for the benefit of the creditors (a common law bankruptcy). However, a general assignment does not automatically wipe out an attachment. Undaunted, I defaulted the defendant, assessed damages and got the money -- all $11,000.00.

The moral of the story is that by not being intimidated by a "going out of business letter," my client received payment in full of its debt. The debtor's other less aggressive creditors no doubt fared much worse.

These news flashes show many debt collection tools, such as ex parte bank and personal property attachments, special attachments of fraudulently transferred property, use of a mechanic's lien and foreclosure. Although positive results don't always happen, armed with proper paperwork (and sometimes not) my use of an aggressive approach to debt collection pays dividends to my clients. Unless tactically warranted, when collecting commercial debt, I immediately sue and pursue prejudgment security so that when you are successful, there will be something to collect.

The old adage that "he who hesitates is lost" is very true in commercial collections. In an uncertain economy, do you want to entrust your collection efforts solely to letter writers and those who may make minimal efforts for you or do you want action?

My clients, which include,  suppliers, contractors, lenders, engineers, and consultants who recognize the effectiveness of my efforts. Shouldn't you? Call Attorney Alan M. Cohen now at 508 620-6900 or email at amc.law@verizon.net