Whether you’re a small business owner or an entrepreneur of a large enterprise in Massachusetts, if you offer flexible credit terms to partners and customers chances are that your financial statements may be showing a yearly increase in account receivables and bad debts. Well, other than the fact that you offer purchases on credit, the reason for the increasing account receivable turnover may be owed to the fact that you’re not using proper debt recovery and collection tactics.
That’s right; it’s extremely important to know what tactics to use for debt recovery because debtors have tons of excuses to deny liability or delay payment. How you deal with the excuses, and what collection tools do you use can make a huge difference in terms of debt recovery or increasing bad debts? And that is not an exaggeration.
Creditors get to hear a number of excuses from debtors who have no intentions of paying back such as
“I have a cash flow problem.”
“The check is in the mail.”
“I’m busy, can’t talk now.”
Either you can stay calm and wait patiently in the hopes of receiving your long due payments or you can exercise your rights given to you by the law to collect your revenues that you’ve worked hard for. In such situations, some business owners turn first to debt collection agencies for debt recovery. But does that really help? NO IT DOES NOT. This is because all that debt collection agencies can do is make threatening calls or send demand letters. The law of the state of Massachusetts doesn’t give such agencies to sue the debtor. Collection Agencies cannot obtain civil judgments. They cannot file debt recovery litigation. They can waste your time and give your debtors a chance to hide their money. Therefore, it is always best to hire and work with experienced creditor rights attorney in Massachusetts Alan M. Cohen.
Alan M. Cohen with his associate Glenn Wegrzyn work in the best interest of the clients and use the most effective collection law tools for smooth and successful debt recovery of civil judgments as well as pre-judgment debt. You can reach out to Alan at the Law Offices of Alan M. Cohen LLC.
At the Law Offices of Alan M. Cohen LLC, we use aggressive, and situation appropriate debt collection and debt recovery tools to recover your monies from your deadbeats. We don’t just rely on the most popular tools. Instead, we use whatever collection law tool that we may think maybe the most effective in your case to get you paid which may include ex parte attachment.
Ex parte attachment is an overlooked collection law tool in Massachusetts but let us tell you that sometimes when you know that your debtor has good financial strength and assets like real estate on their name yet has no intentions of paying you the money that it owes to you, that is when this tool can really work wonders for you. Now if this is the first time you’ve heard about ex parte attachments, then don’t you worry as we’ll explain all that you need to know about it in this post so continuing read to find out more….
Ex Parte Attachment—What is it?
Attachments can be best described as a statutory remedy or collection tool that is available to creditors in Massachusetts that allows them to freeze a debtor’s (defendant’s) asset at the commencement of a lawsuit. Attachments are of two types:
- With notice—that means the defendant (debtor) is notified;
- Without notice or ex parte
Either type, it is basically a prejudgment security law. It enables the plaintiff (creditor) to pursue 2 objectives: security and priority. It may also have the incidental benefit of leveling the playing field. If you’re wondering what prejudgment security means, then let us tell you that this tool helps the plaintiff secure the defendant’s assets while the lawsuit is pending. In other words, the court authorizes the plaintiff to secure the assets of the defendants before the plaintiff obtains final judgment.
This debt recovery tool prevents the defendant from transferring, selling, hiding or encumbering assets before the plaintiff obtains or enforces a final judgment.
Here it is important to understand that attachments are of different types, and that the court allows attachment on ex parte basis only in certain situations.
- Real Estate Attachment
As the name suggests, this is attachment on the debtor’s property or real estate in Massachusetts preventing them from selling or transferring the property to someone else before they pay back your debt.
You file an action in the court to recover your debt, and the action proceeds at a snail’s pace due to different reasons. This gives the defendant or the debtor ample of time to sell off their property, while you lose the perfect opportunity to recover your debt as the judgment hasn’t been entered by the judge. Eventually you get nothing.
However, with the real estate attachment prejudgment security tool you can turn this scenario in your favor by preventing the defendant from taking any such as transferring or selling property.
In Massachusetts the seizure of property is governed by Mass. Gen. Laws ch. 223, §§ 42-83 (attachment) and ch. 246 (trustee process), which are implemented through Mass. R. Civ. P. 4.1 and 4.2. Attachment may be entered only upon a finding by the court that there is a reasonable likelihood that the plaintiff will recover a judgment, including interest and costs, in an amount equal to or greater than the amount of the attachment over and above any liability insurance that is shown by the defendant (debtor) to be available to satisfy the judgment.
In moving for an order or attachment, the plaintiff must submit an affidavit setting forth “specific facts sufficient to warrant the required findings based upon the affiant’s own knowledge, information or belief.”.
The State of Massachusetts allows the ex parte attachment to be used in certain situations only. You can seek attachment on ex parte basis if:
- You think that you will be able to recover judgment in an amount that is equal to or greater than the amount of the attachment over and above any liability insurance known or reasonably believed to be available,
- You are afraid that if the debtor is notified, they may sell or transfer the property or conceal it.
- there is a clear danger that the defendant if notified in advance of attachment of the property will convey it, remove it from the state or will conceal it, or
- There is a clear danger that they will damage or destroy the property to be attached.
- Keeper Attachment
This type of attachment allows the sheriff to take the custody of the personal property of the defendant (debtor). Keeper attachment is highly effective in the situation where the debtor is operating a cash business. This law tool gives the power to the sheriff to seize the money as soon as it comes to the debtor’s business. As the impact of this attachment is directly on the business operation, ex parte keeper attachments are allowed less frequently.
- Bank Attachment
In comparison to keeper attachment, bank attachment on ex parte basis is more often allowed by the court. This attachment allows the creditor to freeze the debtor’s bank account so that they can’t use or withdraw for that matter, the money in their account.
As an experienced debt collection firm in Massachusetts, we advise you to make a copy of every check that you receive from your customers. This is important for 3 crucial reasons. These include:
- Verification of accounts,
- Indicative of continuous banking changes, and
- Also, affords the collection lawyer attachment targets.
When the lawyers at the Law Offices of Alan M. Cohen LLC are armed with all this information, they can easily file a motion for a bank attachment and freeze the debtor’s account before a judgment is won. This helps in gaining security and puts you the creditor in a strong position by leveling the playing field. With an ex parte bank attachment you can ensure that the monies are held aside by the bank to pay you after you have won the case.
Does Attachment on Asset Mean that you are entitled to keep it?
Here it is important for creditor or plaintiff to understand that just because attachments help you seize cash, prevent property from selling or freeze bank account doesn’t mean that you are entitled to keep or use the asset that you have secured. What it does mean is that you can now expect the debtor to come to the table for meaningful settlement discussions that if the debtor was reasonable should have occurred before retaining the Law Offices of Alan M. Cohen LLC.s.
Combining Different Debt Collection and Debt Recovery Tools for Recovery of Due Payments
By leveraging on our 30 years of legal experience, we at the Law Offices of Alan M. Cohen LLC use a variety of law tools (including the proven ones, lesser known and often overlooked collection tools) in combination to effectively recover debts for our clients.
Here’s a quick example:
To help our construction industry clients ensure that they receive payments due, we often use mechanics lien in combination with bank or real estate attachment. By using all the written documents such as email correspondence between the creditor and debtor we prepare a notice of contract and statement of account. This action helps us perfect a mechanics lien.
The next step that we in such a situation may take is to immediately file suit against the debtor and seek an ex parte bank or real estate attachment. If it gets approved then that’s great as we can then secure the asset and be in a winning position. However, if the ex parte attachment gets declined by the court, then we may obtain a short order of notice such as a three day notice. The notice eventually helps bring the general contractor debtor or just plain don’t want to pay its debt to you debtor to the court.
We may also use attachments in combination with our debt collection tools if and when needed to help our clients recover their debts smoothly. However, the strategic approach for debt collection is determined after our attorney Alan M. Cohen reviews and analyzes the creditor’s case thoroughly.
Attachments can also be used for collecting money on foreign judgment from debtors with assets and operations in Massachusetts. However, for that first we’ll have to domesticate the judgment. Don’t worry about it as we have recovered monies of many clients located internationally from debtors residing in Massachusetts or having assets in Massachusetts.
Contact us Today
Give us the opportunity to help you. If you’re struggling with debt collections and want to debt recovery now or help recovering your monies, then call on 508-620-6900 or email us at [email protected] Allow our creditor rights attorney to handle your case and help you smoothly recover the money that your debtor owes to you. By leveraging on our wealth of experience and industry knowledge, we’ll use the best and most effective collection law tool for your case to try to ensure that you get paid. Though we don’t promise you instant debt recovery or that debt recovery will even occur, we can assure you that we’ll use our aggressive approach and continue to follow up with your debtor without giving up. We always work in the best interest of our clients to try to facilitate debt recovery whether it is pre or post civil judgment.