Small business owners must develop an effective debt collection strategy to ensure the success of their business. A New Jersey collection attorney can be an important partner in implementing a collections plan.
The Importance of Obtaining a Money Judgement
In order to collect on a debt, a business owner or other creditor must first obtain a money judgment. That is, you must sue the debtor in court and prevail. Once the judgment is entered and the statutory waiting period for collections has expired, creditors can then commence formal collections proceedings. The key to the success of these collections tools is having good information on the debtor’s assets. The character of the assets will determine which type of collection tools will have the greatest chance of success.
Basic Collections Tools
The law allows a creditor to go after a debtor’s assets in a variety of ways.
Garnishment may be available for payments owed to the debtor. This could be a garnishment against the debtor’s bank account, paycheck, tax refund or other source of money owed to the debtor by a third party. Obviously, the more the creditor knows about the debtor’s assets before a debt is defaulted, the better. Your attorney can help you develop strategies for keeping good records on people and entities with which you transact from the outset.
Creditors can pursue formal seizure of personal property to satisfy an outstanding money judgment. Seizure orders are subject to priority of secured creditors such as mortgage holders.
If the debt owed arose from a contractor doing improvements to real property, a construction lien may be a powerful option. The lien would be filed at the county level and would prevent the home owner from transferring or refinancing the property without first satisfying the lien.
Having an efficient, aggressive debt collection plan is critical to the success of any business. Discuss your case with an experienced New Jersey collection lawyer with the offices of Snellings Law, LLC. To make an appointment to discuss your legal matter, call (973) 265-6100.