Collection Law

To assist our clients in pursuit of the collection of moneys due and owing on accounts receivable, and provide a better understanding of how the legal system can be used skillfully in order to obtain enforcement of payment, the following outline is provided:

Opening file for New Assignments
Within 48 hours of receipt by facsimile or e-mail,. each claim will be personally reviewed by Steven Kerekes. An acknowledgment of receipt of the claim will be sent to the creditor. If the case is accepted by the firm for collection, an asset search will be conducted, including a review of tax assessor¡¦s records to determine real estate ownership and a review of motor vehicle registration information to determine motor vehicle ownership.
Skip-Tracing
Within 7 days of determining that a debtor is obligated on an account with a balance in excess of $50,000, we shall attempt to skip-trace the debtor using various resources at our disposal, including but not limited to, credit bureau reports, reverse directories and public record information. Limited skip tracing will be performed with respect to those accounts with a balance of less than $50,000.
Making demand on the debtor
We will attempt to contact the debtor, both through telephone calls as well as at least one written demand letter, unless the debtor has already advised the client that the debtor has no intention to pay the debt. We will attempt to work out a suitable arrangement with the debtor for payment of the debt.
Commencement of Litigation
Following a review of the account and sending a demand letter to the debtor, if no suitable arrangement for payment has been made, we will file a civil complaint in the appropriate jurisdiction once authorization from the client has been obtained.
Pre-Judgment Remedies

There are several pre-judgment remedies that are available to a creditor to ensure that assets of the debtor, once located, are not removed or dissipated by the debtor before a judgment can be obtained. These remedies are available any time after the lawsuit is filed, and are best obtained immediately after the lawsuit is filed, in order to protect and preserve the debtor's assets and also to leverage the debtor into entering into a settlement. Pre-judgment remedies are as follows:

Attachment of Assets: In connection with the filing of litigation, we will seek the attachment of assets whenever practical, prior to the entry of judgment. Pre-judgment attachment is available in California and many other jurisdictions on commercial claims once the probable validity of an obligation is established. In California, a bond of $10,000 is usually required prior to issuance of the writ. Real property, personal property, and bank accounts may be attached, depending on the jurisdiction. Emergency writs of attachment may be obtained in many jurisdictions, including California, on a 24 hour notice basis upon a proper showing of necessity, but they are the exception and there is a higher standard to obtain one.

Receivership: Under certain circumstances, we may be able to apply to the court to have a receiver appointed to collect the accounts receivable that are being paid to the debtor¡¦s business and have this money held by the receiver pending the outcome of the trial in the lawsuit we have filed for the creditor.

Injunction/ Temporary Restraining Order: We may be able to apply to the court to obtain an order commanding the debtor not to transfer or assign assets, including money in bank accounts and ownership of real and personal property, nor to encumber the equity that the debtor holds in real and personal property.

Request for Entry of Default and Default Judgment
Once the debtor has been served with the complaint, if he fails to answer or file a motion to dismiss within the time allowed for him to file a response, we will prepare and file the appropriate request and/or motion for the entry of default and default judgment.
Settlements
Unless settlement authority has been previously given to us, we will transmit any settlement offer received from a debtor to the client within 24 hours of receipt. In the event the client initiates a settlement proposal, we will transmit the settlement offer to the debtor within 24 hours of the receipt of the client¡¦s instruction. We will thereafter follow-up on the proposed settlement, regardless of who initiated the settlement discussions, until a decision on the proposal has been made.
Payment Plans
We will try to negotiate a settlement agreement that includes a lump sum settlement or, in the case of a large settlement, includes a payment plan. The payment plan usually involves a recurring payment in a predetermined amount. In the event of default, the settlement agreement usually gives the debtor a right to written notice of his default. The settlement agreement usually specifies that if the debtor does not pay within a specified period of time (usually five days) after the notice of default is given, then a judgment for the full amount of the debt, less payments actually made under the settlement agreement, may be entered against him.
Post Judgment Proceedings

Once a judgment has been entered against a debtor, we will make written demand for satisfaction of the judgment. If this is unsuccessful, the creditor has several options to enforce the judgment, including the following:

Debtor Examination: We may obtain a court order for the debtor to appear in court to be questioned by us about his income and assets and the order may include a subpoena issued by the court for the debtor to bring documents evidencing his income and assets, including his bank account records, financial statements which he has submitted for loans or lines of credit, credit card records and employment payment records.

Writ of Execution: We can obtain a writ of execution from the court which allows the Sheriff, Marshall or other law enforcement officer to seize the assets of the debtor, once they have been located.

Placement of a Keeper on the Debtor's Business Premises: We can request that the Sheriff or Marshall send their deputy or representative to the debtor's business to collect all accounts receivable payments that arrive there. This is usually for some limited period of days, but often achieves the desired affect of having the judgment debtor enter into a payment plan to pay off the judgment, rather than have the Sheriff or Marshall sit for several days, without notice, in the debtor's place of business and collect all payments that are received.

Recordation of judgment: Once the judgment is entered, we will record the judgment in the office of the County Recorder of whatever county the debtor possibly has assets. This will constitute a lien on any real property that stands in the name of the debtor. We will also file a personal property judgment lien with the Secretary of State in the state were the debtor is likely to have assets. This will provide a lien against any personal property owned by the debtor in that state.

Satisfaction of Judgment
When the judgment has been entirely paid off by the debtor, we shall notify the appropriate court that the claim has been paid and file a satisfaction of the judgment.
Bankruptcy
If we obtain notice of a section 341 hearing (notice of first meeting of creditors) or information which indicates a petition in bankruptcy has been filed by a debtor, we shall confirm the filing of the bankruptcy proceeding and, if confirmed, shall immediately notify the creditor. We will then cease all collection activity and close our file on the matter or take such further action (filing proof of claim, attending 341 meeting, etc.) as this firm and the client may agree upon.

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