Experienced Attorneys Skilled In Commercial Collections
Obtaining a judgment is often viewed as the ultimate goal in litigation. But enforcement and collection of the judgment can be equally difficult, if not more so. The experienced bankruptcy attorneys at Jones & Walden, LLC, recognize the importance of actually satisfying a judgment and treat the collection process with the same diligence as the underlying litigation.
Our firm represents many debtors and borrowers defending against collection actions as well as creditors seeking to collect on judgments in Georgia. Through our representation of clients on both sides of commercial debt collection cases, we understand the tactics, procedures and legal issues from each perspective. The combination makes us better advocates when handling these and other bankruptcy-related matters.
What Is Commercial Debt?
Commercial debt is any debt owed by an entity arising out of a business transaction. Unlike consumer debt for personal expenses, commercial debt is incurred to finance business expenses, purchase assets and fund improvements. Businesses routinely accumulate a large amount of commercial debt to begin operations and to finance expansion and growth. For businesses struggling with past due debt, commercial debt counseling, consolidation and settlement are viable alternatives to bankruptcy.
If your business is experiencing issues with its commercial debt, Jones & Walden, LLC, can help. Our attorneys have considerable experience negotiating with creditors to eliminate a portion of the debt or restructure the payment terms so the business can service the debt. If your business needs to collect a debt, our attorneys can also assist your business with debt collection from clients and customers.
How Commercial Debt Collection Agencies Operate
When a business has an outstanding debt and payment is past due, the original creditor will typically attempt to obtain payment before sending the account to collection by a third party. If the creditor’s preliminary efforts are unsuccessful, the creditor has several options:
- Sue the debtor
- Sell the debt
- Assign the debt to a collection agency
An assignment of debt can mean one of two things:
- The original creditor hires a third party to collect on its behalf for a fee (which is typically a percentage of the amount recovered).
- The third party purchases the debt and retains any payments received from the debtor through its own collection (rather than remitting the proceeds, less the fee, to the original creditor).
Commercial debt collection agencies that buy debts normally purchase the rights from the original creditor at a fraction of the amount actually owed. They are nonetheless entitled to collect the full face value of the debt. Due to the nature of their business, debt collectors only make money if the debtor pays or assets are seized and sold. To minimize costs, the collection agency first attempts to contact the debtor by phone and mail. If the agency does not receive payment through its own efforts, it may retain attorneys to file a lawsuit.
Understanding Commercial Debt Reduction
Because creditors usually only receive a small portion of the amount owed through sales and assignments of debt to a collection agency, the original creditor is often willing to negotiate a reduced payment amount before transferring the debt. However, no creditor is legally obligated to accept a reduced amount.
Negotiations often focus on the amount the business and its owners realistically can afford to pay. Obviously, a creditor is more likely to accept settlement offers that are close to the original amount owed, but creditors may accept a significantly discounted balance to settle the debt, depending upon the financial condition of the business (and any guarantors).
Professional representation during the negotiation process can create a significant advantage for both creditors and debtors. The attorneys at Jones & Walden, LLC, have years of experience working in this area and can assist you with this process.
Put Your Trust In Our Experienced Legal Team
If you’re a business owner in Atlanta or the surrounding metro area and you have questions about commercial debt collections, our experienced bankruptcy lawyers are ready and able to provide you with the answers you need to take the right steps toward debt relief. We have decades of experience in a range of legal areas — including business law and other related areas — that makes us far more equipped to successfully handle the complex legal issues that arise when business owners are facing considerable debt.