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The Bad
Debt Collection Process
Wrestling with debtors can often be a
tiresome and tedious task for you. The headache
and financial burden of collecting on defaulted bills
can be avoided with an effective debt collection system.
We provide the muscle behind your push for payment.
The process that we employ not only allows us to
prosecute almost any type of debt, but also places a
calculated amount of pressure on the debtor, which
provides the debtor with a fair incentive to pay you.
Getting your due requires placing your debtor's back
against the wall. But more than that, debt
collection is about removing the aggravation of an
outstanding payment from both your lives.
The most fundamental step in your collection comes before
any action is ever taken. In order to most
accurately represent your needs, we necessarily must know
the background and circumstances surrounding the debt.
These factors may affect how we
approach a collection matter and should be fully disclosed
before we initiate any legal action.
While law is generally stereotyped as nothing but miles of
red bureaucratic red tape, we decompress the the "fluff"
and follow a very simple approach to debt collection.
However, as with any venture in life, along the way we
will ask you to weigh the costs of proceeding with the
benefits that you seek. Our simplistic, yet
poignantly strategic, line of attack is efficient and
cost-effective, as outlined below:
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Demand
Letter. We start the ball rolling with
a letter to the debtor demanding payment. Even
though you may have already written many letters
yourself, we have found it effective to follow up
with just one more. This demand letter is
essential for a few reasons: (1) it is
important (not to mention kind on your part) to give
the defaulter one last chance (our experience is that about
15% to 20% of the debtors will attempt to resolve
the problem once they see an attorney has been
retained); (2) there are rules under the Texas
Civil Practice and Remedies Code that govern the
award of attorney's fees that this letter satisfies;
and (3) the letter articulates to the debtor that
you are serious about the collection of your just
claim.
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Plaintiff's
Original Petition. We usually file the
petition within 30 days of the date of the Demand
Letter. The purpose of the Petition is to
alert the court of the situation and formally demand
the payment of all default accounts by the debtor. In
many cases, the Petition is filed within 10 days of
the Demand Letter. For invoices and promissory notes
we always file a special type of Petition known as a
"Suit on Account." This type of
Petition requires the Plaintiff to swear that the
account is, among other things, true, correct, due
and unpaid, and requires the Defendant to answer the
Petition by swearing that the account is not due.
If the Defendant does not file a proper answer, then
the Plaintiff can be deemed by the Court to have
made out a prima fascia case and the Court is
likely to enter a judgment in the matter. We
always include the first round of discovery with the
Petition.
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Motion For
Default Judgment. Upon service of the
Petition, the the debtor has
until 10:00 a.m. of the next Monday after the
expiration of twenty days to answer the Petition in
writing. If they fail to file such an
answer, then we can motion for a default
judgment. The Court reviews the motion, usually
grants the motion without change and enters judgment
in the Plaintiff's favor. It is important to note that the
Defendant is unaware you have asked the Court for
judgment in this case.
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Motion for
Summary Judgment. If, however, the Defendant
files an answer, we usually respond with a motion
for summary judgment. This motion is
predicated on an affidavit from you that the
account is due. The burden of proof then
shifts to the debtor and they are obligated to
clarify for the Judge any discrepancies with our
claim(s). In most cases the
Defendant cannot defend themselves and the Court
awards a judgment in your favor. Note: if
the Defendant can defend themselves at this point by
showing the Judge that there are particular areas of
the invoices that have been paid, then this is not a routine
collection case and we need to carefully examine the
circumstances surrounding the invoices to be certain
everything is "in order."
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Questions?
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I have a
Judgment, now what? After obtaining a
Judgment, we will initiate the actual
collection
portion of the collection process. |
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What if the
defendant has filed a written answer to the lawsuit
and our motion for summary judgment is denied?
More than likely, the debtor has presented a
plausible defense against your claim. While it
is probably very shaky, the defense gives cause for
us to reexamine our strategy. It makes no
sense to treat a case collecting $3,000.00 like a
case that is collecting $300,000.00. No two
cases are the same and should be treated
differently. We usually force cases that have
been denied a summary judgment to
trial, often before a judge, and as soon as possible.
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