COLLECTIONS


In today's ever-changing economic environment, businesses are faced with an increasing number of delinquent accounts. Specializing in commercial collections, the collection attorneys at Bolhouse, Hofstee & McLean offer clients a highly developed, cutting-edge program that utilizes a sophisticated electronic and networking system. This gives our clients a higher rate of return than the traditional collection practices offered by collection agencies and other law firms.

Because of our ability to access the court system, we have more leverage in negotiating settlements on behalf of our clients and more power to enforce judgments. We utilize our multiple tracking and asset-finding systems to give our network of court officers the information they need to successfully complete a court ordered execution. We can also work with out-of-state clients and attorneys to domesticate judgments from other states so they can be enforced in Michigan. The end result is more money in our clients' pockets.

In addition to litigation services, we assist our business clients by helping them develop and implement legal and effective credit and collection policies. This includes educating businesses on how to accurately assess a potential debtor's ability to pay, what debtor information is needed before extending credit, and the steps they can take to collect a debt before litigation becomes necessary.

Attorneys

Related Questions & Answers

If someone owes me money and refuses to pay it, what should I do?

If you've exhausted all other remedies in an effort to get paid, you can hire an attorney who specializes in collections to help you recover the amount that is due and owing to you. It is very possible the attorney may send a letter to the debtor asking for payment, and if that fails, the attorney may follow up with a lawsuit against the debtor.

Is it possible for me to pursue the debtor in Small Claims Court?

Yes. Small Claims Court is designed for non-lawyers. The forms are simple and easy to use. Most court clerks will assist in making sure the paperwork is done appropriately. If the defendant does not ask that the case be moved to the general civil docket which usually requires the involvement of attorneys, both parties can agree to have their case decided by the appropriate district judge in an informal manner.

If I hire an attorney to help me collect the debt, do I have any choices as to how the attorney would be paid?

Yes. Attorneys may collect a debt on behalf of a client either on a contingency basis, or on an hourly basis, or possibly on a combination of both. If an agreement is reached to proceed on a contingency basis, the attorney usually receives a percentage of the amount that is collected. You would then only have to pay for out-of-pocket expenses and not for the attorney's time. An attorney may not be willing to proceed on a contingency basis, in which case an hourly fee contract can be entered into. You would then be paying your attorney on an hourly basis and still be responsible for the out-of-pocket costs. In some cases, an attorney may be willing to proceed with a combination contingency and hourly, charging a lower hourly rate and getting a smaller percentage of any amount collected. Whether an attorney will be willing to proceed on any case depends on the amounts involved, the quality of documentation, and other such issues.

Is there anything I can do to help my attorney collect a debt that is due and owing?

Yes. The most important thing you can do is provide all the information that you have regarding the debtor to your attorney. If you know where the debtor works, where the debtor banks, whether the debtor is married, whether the debtor has assets, where the debtor lives, etc., are all important items for the attorney to know. If you have this information, you should definitely provide it to the attorney. The odds of your collecting on a judgment go up depending on the amount of information given to the attorney.

If I don't know much information about the debtor, is it still worth pursuing a bad debt?

It may still be worthwhile pursuing a debtor if the amount owed makes it practical. Attorneys who specialize in collection have the ability to gather large amounts of information about most people using computers, the internet, investigators, etc. Therefore, even if you don't know much about the debtor, it may be possible to get that information using various resources available to a collection attorney.

Are there things that I can do before I loan money which would make collection easier if a debtor does not pay.

Yes. There are a number of things which can help increase the odds of collection. Getting a contract or some kind of promissory note signed is always beneficial. Getting a co-signer, or guarantor, on the note is also very important. If possible, getting the wife or husband to co-sign for the note if the debtor is married opens up many additional collection options. Also, collecting and maintaining information on the debtor is helpful. Keeping copies of checks, obtaining copies of tax returns, obtaining copies of mortgages, car titles, etc. are all important elements of making a future collection much more possible.

Can I get the debtor to pay my attorneys fees if I have to hire an attorney to collect my debt.

The only way to get your attorneys fees paid is if you have a written contract with the debtor and the contract specifically provides that you are entitled to your actual reasonable attorneys fees if a lawsuit becomes necessary. If you do not have this in writing, the only attorneys fees you can collect are those provided under Michigan law, which are minimal.

If I hire an attorney to collect a debt for me, what is the process that is involved?

Some attorneys will send out a collection letter to try to encourage the debtor to pay the debt. If the debtor does not respond, or the attorney determines a letter was not warranted, a lawsuit is typically filed against the debtor. Once a lawsuit is filed, the collection attorney has to personally serve the debtor with the lawsuit. Some debtors can be hard to find. Other debtors specifically avoid the process servers who are trying to serve them with a lawsuit. Once a debtor is served, if the debtor does not take any action within the time allotted to him to file an answer, the collection attorney may be able to enter a default and default judgment against the debtors. If the debtor files a written answer with the court, it is necessary to go through a trial in order to get a judgment. This can take considerably longer and it depends on the individual court that is involved as to how soon trial dates can be obtained. Once a judgment is obtained, a collection attorney uses various methods in an effort to turn the judgment into dollars.

If I get a judgment against a debtor but can't collect it, what are my options?

Often, the best option if you are not able to collect the judgment immediately after obtaining the judgment is patience. A judgment in Michigan is valid for 10 years, and often you're better off being patient and hoping the debtor improves his financial condition over time and is able to pay the judgment sometime in the future.