When it comes to collecting business debt, the most critical steps occur before the goods or services are even purchased. This is when your business establishes control over the commercial relationship. By taking preemptive measures, you can set a solid foundation that will help you get paid, even if a debtor becomes delinquent.
Our commercial collections litigation attorneys at Law Offices of Alan M. Cohen & Associates LLC have more than 50 years of combined experience. When it comes to commercial collections, our litigators are relentless and aggressive, but ethical. With an in-depth knowledge of state and federal collections laws, they put their experience to work with creative and innovative collections strategies for their clients throughout Massachusetts.
The first line of defense: A comprehensive credit application
A comprehensive credit application is your first line of defense. This document should gather essential information about the potential debtor, including their financial history and references. By doing so, you can assess their creditworthiness and make informed decisions.
Every credit application should require detailed business information from your buyer, financial statements, credit references and personal guarantees. Our knowledgeable commercial collections attorneys regularly draft and review credit applications to make sure they protect your business’s rights and best interests.
A personal guarantee adds an extra layer of security
Never underestimate the power of a personal guarantee. When a business owner or principal personally guarantees a debt, they are legally committing to repay it if the business defaults. This adds an extra layer of security, making it more likely that you will get paid. A personal guarantee increases the likelihood of a payment. It also expands your legal recourse for delinquent debts by providing your company with the option to go after an individual, not just the business.
Solid and tight contracts
A well-drafted contract is the cornerstone of any commercial relationship. It should clearly outline the terms and conditions of the business agreement, including payment terms, interest rates on overdue accounts, and the potential consequences for non-payment. Essential clauses that should be included in a your business contracts should include:
- Your payment terms and due dates
- Interest rates on late payments
- Penalties for non-payment
- Jurisdiction and venue for legal disputes
Our experienced commercial litigation attorneys draft and review your company’s business contracts to make sure everything is legally valid and nothing got overlooked.
Consult A Commercial Litigation Collections Lawyer Today
Establishing preemptive measures ensures that you have the upper hand from the beginning. In the event of a delinquent debtor, you can fall back on these solid foundations to help you get paid. Credit applications, personal guarantees, and solid contracts are not just paperwork; they are your tools for controlling the commercial relationship and securing your financial interests.
At Law Offices of Alan M. Cohen & Associates LLC, we understand the frustration of dealing with unpaid debts. We want to help you prevent them from happening. However, when a debt does go unpaid, we will fight aggressively on your behalf. Schedule a consultation by calling 508-763-6604 or by sending a message through our website form.