DEBT COLLECTIONS for
Occasionally, business owners require help in collecting debts. Whether seeking collection from a partner company, tenant, or customer, recovering delinquent payments are essential to your bottom line.
If past efforts to collect a debt have been unsuccessful, there are still options:
1) Hire a collection agency – Collection agencies can often be successful at recouping delinquent payments, but hiring one doesn’t come without risk. In the event your collection agency employs overly aggressive collection tactics without a proper insurance policy (errors and omissions), the debtor might sue them for violating fair collection laws and a court may potentially find you liable.
2) Sue the debtor —You may individually sue a debtor; however, if the debt is owed to a business entity and the amount owed is over $5,000.00, the Maryland Rules require the business entity to have an attorney represent them in court.
3) Write off debt as a loss – Often when the debt amount is small, you may determine it not worth your time and effort to pursue payment. In some cases, you may be allowed to claim a tax deduction for debt-related business losses.
4) Hire Horman Nichols to collect for you – Horman Nichols knows how to pursue debt collection within the bounds of state or federal debt collection laws. In addition, we’ve found that sometimes simply sending a demand for payment from our law firm can motivate debtors to pay without involving a lawsuit. In the event, further actions are required, a our attorneys can advise you on best next steps.
Bill Payment and Debt Collection
Every business is unique, and depending on the type you own, you may require numerous types of contracts outlining how, when, and in what manner you expect to be reimbursed for your goods or services. Simplifying payment methods – such as accepting PayPal payments or electronic transfers – can reduce delays that often accompany the processing of paper checks.
Legal Remedies for Delinquent Debts
Legal Remedies for Delinquent Debts
If you find that past attempts to collect on debts have failed to get a response, suing the debtor may be the only remaining option to recoup the balance. If your case involves less than $5,000, it may be filed as a small claims action with the District Court of Maryland. For cases involving more than $5,000 but less than $30,000, lawsuits may be filed in the Circuit Court or District Court; and cases involving more than $30,000 must be filed in Circuit Court.
When the court enters a judgment in favor of the plaintiff, the plaintiff may enforce the judgment by filing a petition with the court for:
Oral Examination – this is an opportunity to require the judgment debtor to appear in court, placed under oath, and provide information as to their income and assets. This process can assist in discovering information in how to proceed with collecting on the judgment.
Lien/Sherriff’s Sale – In these cases, a lien can be placed on the judgment debtor’s property (such as land, or a vehicle) and can be sold, and the proceeds from the sale are used repay the judgment creditor.
Writ of garnishment – On order by the court order, the debtor’s bank is allowed to release account funds for the purpose of repaying a debt.
Garnishment of wages – In these situations, 25% of a debtor’s disposable wages can be garnished until the debt is repaid and the judgment satisfied.
Hire a Debt Collection Lawyer in Frederick, MD for Help
If you choose Horman Nichols to handle your business debt collection, we will do everything in our power to ensure you’re made whole without the inconvenience of going to court. But if litigation becomes unavoidable, you can be sure we’ll fight hard in your corner.
Contact us online, or call us at 301-663-8101, to ask about our debt collection services for businesses.