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What is the difference between a litigation attorney and a collections attorney when it comes to bad debt recovery?

by | Apr 12, 2019 | Experienced Attorney

Bad debts can create a host of problems for individuals and businesses. After a number of unanswered phone calls and when doors of communication start to get shut, you can call a Litigation Attorney or a Collection Attorney who litigates for your bad debt recovery and debt collection. However, there are some important differences that businesses should know before engaging a litigation attorney, or Collection Attorney as part of the debt collection process.

Before looking at what kind of attorney may better suit your needs. It is important to understand why a debt collection attorney is needed in the first place. A debt collection or a litigation attorney may serve different purposes as we will see here.

Litigation Attorney

Litigation attorneys are also known as trial lawyers can represent either the plaintiff or the defendant in a civil case. They provide a full spectrum service from investigating the matter, pleading an offense, discovering evidence, and move forward with trial, settlements, or appeal processes. However, litigation attorneys generally are not experienced about the way bad debt collections are made. This is in contrast to what collections attorneys can do, which includes not just litigation but post-judgment collections too. Litigation services might be expensive, and many litigation attorneys are paid on an hourly basis. Litigation attorneys may have a standardized fee structure and may be under no obligation to do debt collection work after a judgment has been made. As litigation attorneys may not be informed on the ways of bad debt collection or judgment enforcement, they may miss the opportunity to seek prejudgment security or lack the knowledge and tenacity to collect your judgment. Collection attorneys who litigate not only know how to try cases; they also know how to collect your judgment debt. In Massachusetts, the Law Offices of Alan M. Cohen & Associates LLC have experienced collection attorneys, who know how to litigate and collect judgments.

Collection Attorney

A collection attorney can be hired either from the start, during, or after litigation is complete. Because litigation attorneys may not be comfortable enforcing Massachusetts judgments or foreign judgments, hiring a collections attorney somewhere in the process is essential. Collection attorneys have the legal knowledge, procedural understanding, relationships, and resources needed to engage in bad debt collection both during and after litigation. Unlike litigation attorneys who are generally available only on hourly wages, collection attorneys generally work on contingency, hybrid as well as on an hourly basis. A contingency fee means that the fee is contingent on actually collecting your bad debts so that you are not throwing good money after bad. Generally, no recovery generally means no fee. Of course, there is also the opportunity of a hybrid fee in which an hourly fee is charged capped at a negotiated amount which is applied or not applied to the amount recovered on the contingency fee.   In hybrid fee structures, there may be low fees for the litigation services provided, and a higher contingency fee basis on the collection.  Finally, there is the hourly fee. In each scenario, most lawyers obtain an out of pocket expense retainer for, well, the out of pocket expenses. Regardless, a collection attorney is a more effective way to have bad debts collected under civil proceedings due to their extensive knowledge of collection matters.

At the Law Offices of Alan M. Cohen & Associates LLC, our clients can usually choose which fee structure that they feel most comfortable.

How Collection Attorneys Pursue Bad Debts

In a pre-judgment process, a collections attorney can use a variety of injunctions to try to ensure a favorable judgment can be collected. These can include the use of Rule 65 injunctions, also known as restraining orders, reach and apply injunctions, and equitable injunctions as well as bank attachments, real property attachments, special attachments, personal property attachments and keeper attachments. Collections attorneys can seek both prejudgment security and post-judgment asset seizure to collect the bad debt. Post judgment, a collection attorney may use a variety of ways to assess if the debtor has the potential to pay the judgment debt. Because, debtors rarely disclose their financial assets and bank accounts that can be used in seeking repayment of bad debts, the experienced attorneys at the Law Offices of Alan M. Cohen & Associates LLC use post judgment document depositions to financial institutions such as credit unions and banks in order to assess and identify where a Judgment Debtor may hold their bank accounts.  The information sought can lead to revelations of where the judgment debtor does business. Post judgment bank attachments can lead to a recovery of some or all of a recalcitrant judgment debtor’s non- money.  A collection attorney can use an information subpoena as a way to seek evidence and information on any undisclosed debtor assets that may aid in bad debt recovery. It is all about the money and the trial it leads. While others may give up, the experienced award-winning collections attorney at the Law Offices of Alan M. Cohen & Associates LLC relentlessly follow the money trail to try to get their clients judgment debts paid. Post judgment collection activity can proceed under Massachusetts Rule of Civil Procedure 69, where post-judgment enforcement and depositions can be used to effect debt recovery.

A bank attachment or reach and apply injunction can with court approval, be served on banking institutions and businesses that may have money in the account or owe monies to the judgment debtor, respectively. An information subpoena can be sent to any person or entity from whom the collection attorney believes may have information about the judgment debtor’s assets. It is important to hire the relentless, aggressive and ethical collection attorneys who have the experience in collecting judgments at the Law Offices of Alan M. Cohen & Associates LLC. They have over 35 years of experiences in bad debt collection, judgment enforcement and domesticating foreign judgments. They know how to and aggressively pursue judgment debtors to collect judgment debt. Not only have they the resources and relationships to pursue high profile debt collections, but they also have a proven record of establishing a link to undisclosed assets, playing a key role in enforcing both Massachusetts judgments and foreign judgments. This applies to post-judgments seizures where Sheriffs can be contacted to seize and sell non-exempt debtor belongings as per the court order, with all net proceedings paid to the creditors. This form of using legal means to seek information and seize it to collect debts is a proven collection process.

Apart from seeking restraining orders and information subpoena on banking records and transfer of properties, the top-rated collection attorneys at Law Offices of Alan M. Cohen & Associates LLC also pursue wage garnishment proceedings against individual judgment debtors. This is useful for individual debtors who have skipped their payments and cannot be relied upon to voluntarily timely make periodic payment. Before proceeding, a civil judgment is required for a creditor to proceed with wage garnishments.

A collection attorney may also use their resources to seek vendor support and official databases to find the current and previous debtor employment details. For this purpose, there are wage garnishment laws that need special attention and supervision. There are special databases that are applied for this search and only up to date technology can assist in finding bank accounts and current place of employment.

Because an individual debtor may have a different set of legal protection under the Fair Debt Collection Practices Act, collection attorney may help.

Another important area where a collection attorney is of more benefit than the limitation attorney is in the area of foreign judgment enforcement. Collection attorneys who know how to litigate generally are knowledgeable of fellow collection attorneys in other states. Further when the judgment debtor’s assets are in Massachusetts, the only place to turn is to the Law Offices of Alan M. Cohen & Associates LLC. As Massachusetts is not a signatory of the Foreign Judgment Act Uniform Enforcements, foreign judgments cannot be enforced by registration. This makes enforcing foreign judgments inside the state of Massachusetts harder than the other 47 plus states. You need attorneys experienced in foreign judgment domestication and foreign judgment enforcement. You need the top-rated attorneys at the Law Offices of Alan M. Cohen & Associates LLC.

Although many believe that just having judgment is enough in collecting bad debt, it is harder than one thinks because the most crucial part of any business litigation is getting paid. After the judgment, getting hold of assets and selling them to recover debts is important. Many businesses, contractors, sub-contractors, and repair shop owners don’t know their legal and statutory rights in relation to the type of lien they can use and their potential benefits. A Mechanic’s Lien can help protect construction workers and sub-contractors from being stiffed by allowing them to lien the property owner of the property that they have helped improve. Likewise, a Garageman’s Lien protects repair shop owners from bad debts by helping them collect for vehicle repairs. These judgments may arise from other States too. It is where an experienced foreign judgment collection attorney will help and assist you in the enforcement of foreign judgments. Seeking domestication and collection of a foreign judgment should never be delayed.

In addition, there is the pursuit of monies due as a result of a foreclosure deficiency. The collections lawyers at the Law Offices of Alan M. Cohen & Associates LLC have the experience and tenacity to pursue foreclosure deficiencies, turn them into judgments in favor of the judgment creditor and pursue same to the collection. A deficiency arises when there is a mortgage foreclosure selling the real estate assets of a debtor, but the proceeds are not sufficient to repay all of the debts. Experienced collection attorneys will pursue such a case in an aggressive manner to help ensure that the foreclosure deficiency is collected.

Final Thoughts

As highlighted above, the various processes that can be used in the bad debt collection process require a collection attorney to maximize your bad debt recovery. Litigation attorneys are more inclined to focus primarily on winning the litigation. Collections attorneys who litigate are not only focused on winning the litigation; collections attorneys are also laser-focused on getting you paid. Collections attorneys focus on bad debt collection for a wide range of businesses. They can assist banks, mortgage lenders, other attorneys, accountants, construction contractors and sub-contractors, car repair shops, electronics appliances providers and many other businesses that provide services or sell materials on credit.

This is where the full spectrum services of experienced and technologically advanced collection attorneys at the Law Offices of Alan M. Cohen & Associates LLC can serve your purpose and provide you with the much-needed assistance to obtain and/or collect your civil judgments and enforce your foreign judgments. The Law Offices of Alan M. Cohen & Associates LLC are known in legal circles because of their 35 plus years of successful debt collection record in the Commonwealth of Massachusetts. Their full spectrum services include bad debt collection for businesses, support for contractual businesses, and enforcement of foreign judgments and Massachusetts judgment collections.

An appropriate bad debts collection process can have a significant impact on your operations. Bad debts can increase overall operational and borrowing costs for any businesses. These difficulties may continue to rise if the process reaches a bottleneck. In such cases, the aggressive, tenacious and effective debt collection attorneys at the Law Offices of Alan M. Cohen & Associates LLC can be your best option.

For more information about how the award-winning top-rated collections attorney who know how to litigate at the Law Offices of Alan M. Cohen & Associates LLC can help get you paid, click here or call 508-763-6604 or email [email protected].