Ex Parte Bank Attachments

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Unlike some other attachments, freezing your debtor’s bank account so that they cannot use or withdraw “their” money usually has a sudden impact on the debtor. Even when the attachment does not catch any funds, it can bring the debtor to the table for meaningful settlement discussions.

I recommend making a copy of every check that you receive from your customers for three reasons:

  • Accounting verification
  • Indicates continuous banking changes (a red flag); and
  • Affords the collection attorney attachment targets

Armed with knowledge of the debtor’s last known bank, I often file a motion for a bank attachment. There are two ways to obtain a bank attachment — with notice and ex parte (without notice).

It is important to remember that attaching the money in a debtor’s account does not automatically entitle you to that money. Rather, it is merely a form of gaining security — monies are held aside by the Bank to pay you after you have won the battle. Simply stated, the role of prejudgment security is to help ensure that after you have won the battle, you win the war and now control your own money.

The attachment of a debtor’s personal property allows you to put a lien on a company’s inventory, equipment, furniture, etc. The attachment gets posted at your debtor’s place of business for all to see and is the recorded with the Office of the Secretary of State. When a business attempts to sell its assets, your attachment often will lead to payment.

Success Story: A doctor hires a lawyer to help him buy a high tech company. Although promising to pay the attorney’s bill, the doctor makes only sporadic payments. Before long, the good doctor became Dr. Deadbeat to the tune of $80,000.00.

The Attorney hired Massachusetts debt collection Attorney Cohen to collect his money. We immediately sued. The District Court allowed our ex parte motion to attach Dr. Deadbeat’s bank account and real estate. Although the bank attachment only caught a few hundred dollars, we attached Dr. Deadbeat’s house that he owned with his wife as tenants by the entirety. Because of the tenancy by the entirety, we could attach, but could not sell the property.

One day after Dr. Deadbeat failed to file his answer within the time provided by court rules, we appeared in District Court and obtained a default and default judgment.

Knowing that we could not sell Dr. Deadbeat’s house, we filed a Complaint on the Judgment in the Superior Court. We sought and obtained an injunction preventing Dr. Deadbeat from receiving any money from his practice. The Court ordered him to pay all monies that he received from any source directly into escrow.

Dr. Deadbeat now worked for the sole benefit of our client. Two months went by without receiving any of the court ordered payments. We scheduled the deposition of the person most knowledgeable about Dr. Deadbeat’s practice – his former secretary.

She told Attorney Cohen that Dr. Deadbeat had been putting monies that he received from his practice directly into his wife’s account, violating the Court’s order. The bank’s records confirmed that he had put almost $15,000.00 into his wife’s account.

Dr. Deadbeat filed for bankruptcy in a last ditch attempt to stiff his client. Dr. Deadbeat Failed. Due to our knowledge of the Bankruptcy Code, the Bankruptcy Trustee could sell Dr. and Mrs. Deadbeat’s home and apply Dr. Deadbeat’s share to pay his creditors.

Trapped, Dr. Deadbeat’s lawyer offered $10,000.00 now and another $10,000.00 paid over five years. We rejected the offer. Because of Attorney Cohen’s aggressive negotiations, Dr. Deadbeat finally agreed to cough up almost $70,000.00 within 60 days, proving the old adage one can run but one can’t hide!

For Innovative, Aggressive and Effective Collection of Delinquent Accounts Receivable from Businesses anywhere which are subject to Massachusetts jurisdiction, call (508) 620-6900, use the form to the right or email alanmcohen@collections-law.com.

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