Business Debt Collection Attorney in Fresno
Serving Kings, Madera, Fresno, Tulare, and Merced Counties
If you’re a business owner, you are likely familiar with the frustration of trying to collect unpaid debts. Working with a collection agency often produces subpar results, with many debt collectors simply giving up on certain obligations rather than pursuing them fully. Working with a debt collection lawyer can help you get better results, and may result in far higher returns for your debt collection efforts.
Commercial or business debt collection is critical to companies of all sizes. When customers or other businesses fail to pay for the goods or services that you have provided to them, it can seriously impact your bottom line. An efficient, cost-effective debt collection strategy can help keep your business profitable.
At Nunes Law, we are skilled in all aspects of business debt collection. Our goal is to help our clients win the collection dispute — without losing the war by spending more than what is practical on any given debt. From our law office in Fresno, we represent clients throughout Kings County, Madera County, Fresno County, Tulare County, and Merced County on a range of commercial debt matters.
Debt Collection Practices That Make Sense for Your Business
As with any legal matter, evaluating each of your options is critical to making an informed decision about how to proceed. When it comes to business debt collection, that requires making a decision about whether to take an outstanding debt to small claims court, or to come up with other strategies with the assistance of a debt collection lawyer.
In California, there are strict limits on how much money a party can claim in small claims court. Individuals can sue for up to $10,000, while corporate entities are limited to $5,000. Both individuals and corporations can file no more than 2 claims that exceed $2,500 in any small claims court in a calendar year. The filing fee for a small claims court complaint is $181.00.
For businesses with a few past due accounts or past due accounts for relatively low amounts of money, small claims court may make sense. In most cases, however, the maximum claim amount of $5,000 and the limit on the number of cases that can be filed in a year make small claims court an impractical solution. Perhaps more importantly, even if you win in small claims court, it can be difficult to enforce the judgment and collect your money.
A business debt collection attorney can utilize their knowledge of California law in order to develop a plan for debt collection that (1) maximizes potential recovery and (2) minimizes expenses. Your lawyer can analyze each outstanding sales invoice or contract in light of the laws governing that type of debt and likelihood of recovery, and then advise you of which debts are worth the time and expense of pursuing.
Some companies choose to work with a debt collection agency in lieu of an attorney. These agencies typically make a profit by taking on a high volume of cases, sending out form letters to debtors and performing minimal follow up. In most cases, a debt collection agency will not craft a strategy that is tailored for the specific needs of your business.
How a Commercial Debt Collection Lawyer Can Boost Your Business’ Bottom Line
When you hire a law firm that performs business debt collection, you are getting more than just a company that makes a few phone calls or sends out letters to go after outstanding accounts receivable. Instead, you will have access to a professional with experience in and knowledge of the laws and regulations surrounding debt collection in California.
Unlike consumer debt (such as credit cards and student loans), which is governed by the Fair Debt Collection Practices Act, the practice of commercial debt collection is largely unregulated. However, there are still rules that apply to all types of debt collection. Your Fresno debt collection lawyer understands those rules, and will work within the bounds of the law.
At Nunes Law, we start each business debt collection case by reviewing the contract or other document at issue. In California, the statute of limitations bars claims made after a certain period of time has passed. For example, claims for breach of contract must be brought within 4 years of the date that the contract was broken if the contract in writing, or 2 years if the contract was oral. This type of review is essential to ensuring that your company isn’t wasting time and money pursuing a claim that cannot be enforced in court.
After this initial analysis, our law firm will investigate the debtor, using technology to track down their assets and discover any outstanding judgments against them, bankruptcy filings, or other issues that may affect their ability to repay their debt. In some situations, you may decide that it is more cost-effective to simply write off a debt. We can help you make that decision.
If you move forward with debt collection, we will begin the process by reaching out directly to the debtor. In many cases, an attorney who is experienced in business litigation can negotiate a debt settlement that allows you to maximize your recovery. When debtors refuse to pay their outstanding debts, our law firm will pursue all options to collect, including filing a lawsuit in state court and foreclosing on secured loans.
After taking a debtor to court, we will utilize a variety of methods to enforce any judgement against them, which may include additional fees that arise during the collection process. This may include filing a lien against their real estate or other property or wage garnishment.
Fresno Business Debt Collection Attorney FAQs
How Is Business Debt Collection Different from Consumer Debt Collection?
Business or commercial debt collection focuses on recovering outstanding debts that are owed by one business or person to another company, or by a person for a debt that is related to business. By contrast, consumer debt collection involves recovering money that is owed for personal purposes. Business debts are often for products or services, while consumer debt is typically for things like credit cards, medical bills, mortgages, and car payments.
Consumer collection is heavily regulated by both state and federal law, including the Fair Debt Collection Practices Act.The California statute is called the Rosenthal Fair Debt Collection Practices Act. Commercial debt collection is not regulated as heavily as consumer debt collection, although there are a number of California laws that govern the collection of commercial debts.
There are also specific time limits, known as a statute of limitations, for taking action on certain types of debt; after the statute of limitations has run, the debt cannot be collected. For example, an action to recover based on a written contract must be commenced within 4 years from the date on which one of the parties breached or broke its promise to pay. Verbal contracts are governed by a 2 year statute of limitations that also runs from the date when one of the parties breach or failed to do something, like make a payment, under the agreement. A skilled Fresno business debt collection attorney can evaluate each of debts owed to your company, and develop a strategy for collecting these funds in an efficient, cost-effective manner.
Why Should I Use a Business Debt Collection Attorney Instead of a Collection Agency?
Many collection agencies simply send form letters to debts, with the names, addresses and dollar amounts added to each letter. An agency may follow up on these letters with telephone calls, or even by using robo-call software. If collection seems doubtful, the agency may simply stop trying to collect the debt.
Business debt collection attorneys do not operate on a high-volume basis. Instead, their focus is on building a relationship with a client, whether the client is a small business or a large corporation. A lawyer will analyze each debt, review the law that applies to the debt, and customize a strategy that fits the client’s needs.
Debtors are often more responsive to correspondence from an attorney, as opposed to a form letter received from a collection agency. A skilled Fresno business debt lawyer can negotiate on your behalf with a debtor, and if collection attempts fail, take the legal action necessary to recover the money. This may include options such as filing a lawsuit for judicial enforcement, asset investigation, wage garnishment, property liens, and foreclosing on secured loans. In these situations, recovery may also include fees associated with the debt collection.
What Is the Likelihood of Recovering Money from a Business Debtor?
As with many legal questions, the answer is to this question: it depends. There are numerous factors that affect whether your business will be able to recover money from a debtor. This includes:
- How old the receivable is;
- Whether the debtor is still operating;
- If the debtor has unencumbered assets;
- How thorough and accurate the records of the debt are;
- Whether the debtor is in bankruptcy proceedings or other collection litigation; and
- If the debtor has other unsatisfied judgments against them.
Many of these questions can be answered through a thorough investigation of the debtor’s affairs, including tracking down their assets and reviewing both corporate and court records. A business debt collection attorney can take these steps while researching California law to determine a possible basis for a collection action against the debtor.
Ready to Start Collecting on Past Due Accounts? Reach Out Today.
As the owner of a small or medium-sized business, you know that every dollar matters. At Nunes Law, we understand that reality — because we’re also small business owners. We take that into account for each of our business law clients as we work to recover debts on their behalf.
With more than 20 years of experience, attorney Frank M. Nunes is highly skilled at handling all types of commercial debt collection matters. We work collaboratively with each of our clients to find the best strategy to collect on their accounts. To learn more or to schedule a consultation, contact us online or call our office at 559-436-0850 (toll free: 866-267-0367).