Who Owns This Debt? A client recently placed a substantial commercial debt for consulting services with my firm. Upon contacting the debtor, I found that the debtor had beaten us to the punch: They had filed a Complaint for breach of contract to preempt my client’s collection activity. In such a situation, unless the debtor […]
Mechanic’s Liens
Many times a subcontractor, laborer, or equipment lessor providing materials or services for a construction project, does not have a direct contractual relationship with the owner of the property. For example, a property owner may hire a general contractor to redo his kitchen, and the contractor may then hire a subcontractor to provide the carpentry. […]
Can I Cash This Check Without Compromising My Claim?
What should a creditor do if a debtor sends a check with the notation: “paid in full” or other similar language, but the creditor believes a greater amount is owed? Does cashing the check settle the claim, thereby preventing the creditor from pursuing further collection? What happens if creditors cash this check without realizing the […]
What to Do When Your Debtor Goes Out of Business
When a company winds down and closes its doors, it can frequently leave creditors holding a bill. Your debtor goes out of business. Generally, California law grants wide deference to the protection provided by corporations to shareholders and directors, and grants similar immunity to new companies. It erects a wall against the former company’s creditors, […]
When a Client Becomes a Debtor
Tools and Pitfalls When Collecting Delinquent Bills When a client becomes delinquent on its bill, but there’s still some hope the situation will be rectified short of writing off the account and placing it for collection, there are several tools available to a creditor to pressure the client to pay. Attaching Interest on a Debt […]
Should Salespeople be Involved in Collections?
This was posed to me as a topic recently and it raised my eyebrows after I had my initial knee-jerk reaction of wondering why anyone would want a non-professional involved in the collection process. However, deeper thought about it made me realize the sales force indeed has a role in ensuring delinquent accounts are paid […]
Days Sales Outstanding
I recently mentioned the “DSO” statistic at a meeting of sales managers and was not surprised to see many blank faces staring at me in return – they had no clue what the statistic is or what impact it has on their business, even though most of them were also owners of their businesses. Most […]
A Solid Receivable Recovery Policy
by: David E. Greenberg So many times you’ve heard debt collectors and lawyers express dismay over why creditors hold onto delinquent debt without taking any action to bring in those missing dollars. That dismay comes from knowing a variety of factors. Failure to take action on a delinquent debt can cause the receivable to become […]