ARTICLES OF INTEREST

THE CHECK'S NOT IN THE MAIL

We all know that we want to obtain our client’s money.  The quicker we can do that the better.  We have developed several systems to accomplish this goal.

First, we have a local courier pick up the debtor's checks.  We have worked out an agreement with a local courier service to have them pick up the debtor's check's for a flat fee.  We can have the checks in our office as soon as a few hours after the initial contact with the debtor.  

Second, we are now using FEDEX to pick up debtor's checks throughout the State of Florida.  We can have the checks in our office the next day.

Third, we are now using telephone checks.  The process is simple.  The debtor provides us with a fax copy of his check (or we can take the information over the phone) and we print a check in our office.  In this way we can deposit the check the very next day.

These 3 new techniques have increased our collections greatly.  Of course this is all done at our expense and does not affect our client's net recovery!

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WRITTEN SETTLEMENT AUTHORIZATION

The one thing Steve requires of all of the collectors and attorneys in our firm: if we are settling a case for less than the full amount, the settlement authorization must be in writing.  This is to protect the client.  We do not want to enter into a settlement that has not been authorized.

We realize it can be a drag but it alleviates any problems with employees trying to get a settlement that may not be authorized.  Steve has told his employees for years that if they accept a settlement without written authorization, the money is coming out of their pocket, and no one has had to pay him yet!

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LEVYING ON LAWSUITS

We have a judgment against the debtor.  We take his deposition and the only asset he has is a lawsuit wherein he is suing someone else.  Close the file? No!

The lawsuit is an asset and we can levy, much like we levy on an automobile.  We have developed a form motion that usually gets the job done.  We ask the court to seize the asset, in this case the asset is the lawsuit itself; and sell the asset at public sale.

Can you picture it?  We have a $5,000.00 judgment and our judgment debtor is Plaintiff in a case where he is suing the third party for $100,000.00.  Obviously, if his lawsuit is sold and we buy it - probably for a minimum amount - we would settle with the 3rd party for our judgment amount.  The judgment debtor is not going to let this happen.  So he pays us and the case is over.

The threat to the judgment debtor is so great that we have yet to see one of these levys go to sale.  Our post judgment department checks for lawsuits as part of our normal post-judgment collections.

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ATTORNEYS FEES AND INTEREST

Florida does not allow for the recovery of attorney's fees (with a few exceptions) unless you have an agreement signed by the debtor that specifically authorizes attorneys fees.  Even with that agreement, in most cases only the judge can determine the amount of the fee.

Further, Florida limits pre-judgment interest at the legal rate - presently 9% (2006), unless you have a signed agreement calling for a higher rate.

We recommend that all credit applications and contacts, etc. include language including but not limited to:

Delinquent accounts shall accrue interest at the highest rate allowed by law.  Customer shall pay all costs of collection including attorney's fees.

If you have language similar to this you can obtain 18% interest on your debts, from the date of the debt.

Of course the exact language should be prepared by your own attorneys, as the above language is for illustrated purposes only, and may only be applicable in Florida.

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CREDITORS ADDRESS ON JUDGMENT

Florida law states that if the creditor's street address is not on the face of a judgment, that judgment will not operate as a lien against the debtor's property.  A P.O. Box is not acceptable.  We have set up our computers so that no judgment can leave this office without the information from the documents forwarded to our office with the file.  If we can't find the address from the documents, we will call you for the information.

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ORGANIZATION

Why have we succeeded when others haven't?  It's not marketing.  We don't market.  We believe it's organization!

We have three departments: 1) Collections; 2) Legal; 3) Office.  The three departments are each organized by their manager.

Organization must be preached to the employees.  We are dealing with so much paper that it can become overwhelming.  Therefore, we have instituted the following:

1.  CollectionMaster Software.  We looked for years and decided to use the best (and the most expensive).  Everything on each file is at our fingertips.  Reports can be run on most everything.

2.  Imagemaster Scanning Software.  Every document that enters our office is scanned into our computer and kept on its own server.  Every document is available to each user at the touch of a mouse.  When you call with reference to a letter, we don't have to ask the file clerk for it, it's there!

3.  Manual.  We have a 200 page manual that is a on screen with a hard copy notebook at every desk.  Every employee can look up pages from "acknowledgement letters" to "closing letters", from "file suit" to "post-judgment discovery" and follow the instructions to get the job done.  We have worked on this manual for years (Scott Modlin is the main author) and we are very proud of it.

4.  Employee Training.  Every employee, from lawyers to file clerks, must read an article on commercial collections from the Commercial Law League of America the day they begin work in our firm.  From that day on, we continue their education, be it on the Fair Debt Collection Actor litigation strategy.

5.  Backup.  Backup.  Backup.  Every day we think and rethink our computers.  We spare no expense and want nothing less than the total protection.  Therefore, we have the best Compaq file server, duplexed, backed up every night.  The backups are kept offsite.   In addition we keep the data files to two other hard drives on seperate machines.  Every two weeks, Scott and Steve take a copy home not to be returned.  Our scanserver is backed up the same way.

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OUR TOLL FREE NUMBER

We now have a toll free telephone number for your use.  The number is 800-440-6289.

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FILING SUIT: YOUR ATTORNEYS VIEW

The secret of collecting money in suit is obtaining all of the clients information and documents before filing suit.  It is not an easy task.  A good amount of our time is spent searching for this information.

The first question is who to sue! Is the debtor an individual or a corporation? Was the alleged corporation actually incorporated when the debt was incurred? If it was not yet incorporated or already dissolved, we may be able to sue the owner.

Who is the owner?  Sometimes it is almost impossible to know the principals name.  If we can not find a corporation and the creditor does not know the name of the person they dealt with, we will not have a debtor that we can sue.  However, the creditor may have documents that help answer these questions.  These include:

1. Collection Notes

2. Credit Application

3. Guaranty

4. Credit Information/Worksheet

5. Invoices

6. Statements

7. Bad Checks

8. Good Checks

You may laugh when you see "good checks" but they are invaluable.  Not only do they help us identify the correct debtor but we will know where they bank once we obtain judgment.
The bottom line is we need your help.  The creditor does not want us to sue the wrong debtor.  In addition, we want to sue all debtors that are liable.  This increases the likelihood of success.

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COLLECTING BAD CHECKS

You have a free Attorney.  Why pay us to collect on your bad checks?  You don't always have to.  If you prepare correctly, you can use the State Attorney to collect your bad checks for free.

In addition to being free, we think the State Attorney has slightly more clout than we do.  Who would you rather pay, someone who is threatening to obtain a judgment against you or someone who is threatening to put you in jail?

In Florida any check up to $149.99 which bounces is a first degree misdemeanor and any check over $150.00 is a third degree felony.  The Statute of Limitations on the misdemeanor is two years from the date the check was written or delivered and under felony three years.

Unfortunately, there are several; problems with using the State Attorney.  First, you must use the State Attorney for the specific county where you want to file the case.  Every county has separate rules, the State Attorney for that county will not accept your case.

As an example, the State Attorney for Broward County, Florida, requires the following before they will take a case.

(1)  The check must not have been post-dated.

(2) The check writer must not have asked the acceptor to hold or delay deposit on the check.

(3) The check must have been accepted in Broward County, Florida or mailed from Broward County.  If mailed, the envelope with post-mark is needed.

(4) The check must have been deposited within thirty days of issuance.

(5) The check must be stamped with the bank processing date and reason check was returned.

(6) The following information must be written on the check at the time it is accepted: full name, sex, height, date of birth, race, home address, home and business telephone numbers OR driver license number and State.

(7) The person accepting the check from the check writer, or some other witness, must be able to appear in court and positively identify the Defendant.

(8) You must mail the Florida Statutory Dishonored Check letter by certified mail to the Defendant and attach it to your complaint.  (If you need a copy, we have it for you).

Remember that if the State Attorney will not accept your case, we can still go after the defendant in civil court.  In Florida, we can sue the Defendant for the original check amount, plus an additional three times the check amount, plus attorney's fees, court costs, and interest.  It's a great vehicle for getting your check paid!

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POST-JUDGMENT COLLECTIONS MADE SIMPLE

The purpose of Post-Judgment proceedings is to enable the Judgment creditor not only to discover assets, but to be paid as quickly as possible.

When this office obtains a judgment the file immediately goes back to the collections department.  A collector who specializes only on post-judgment files initiates collection activity against the debtor again, and reviews the hard file for any and all asset information.  If we find an asset we will want to grab it!  You will immediately hear from us.

If we can't locate any assets, the first step we must take is to find out exactly what assets, if any, the debtor has.  This is known as Discovery in Aid of Execution.  The Florida Rules of Civil Procedures allow discovery by any of the following methods; depositions upon oral examination or written questions; written interrogatories; production of documents or things, and permission to enter upon land or land or other property for inspection and other purposes.

A deposition upon oral examination is one in which the judgment creditor and the debtor appear in front of a court reporter who will take down the questions asked by the creditor and answered by the debtor under oath.  The questions will pertain to assets the debtor possesses, salary  he/she is earning, cars, bank accounts, etc.  A deposition upon written questions, which is not as common, in one in which the questions, which is not as common, is one in which the questions are served upon the debtor prior to the deposition and they are answered in front of a Court Reporter.

Written interrogatories are also questions that are provided to the debtor in writing and are answered in writing under oath but not in front of a Court Reporter.  They are simply mailed back to the Judgment creditor.  This is the  cheapest method (the court reporter charges $50.00 for every deposition) but this method takes longer.

The debtor can also be requested to produce documents or items.  We can request copies of income tax returns, savings and bank account statements, title(s) to property or vehicles along with other documents or things which may lead the creditor may be in a position to execute upon, the  creditor may inspect the land.

If a Judgment debtor does not comply with discovery, we will seek an Order from the Court compelling the debtor to comply with discovery.  Failure to comply with the Court's Order may result in the debtor being held in contempt of Court.  Should the debtor fail to be "purged"  of the contempt by complying with the discovery order, the Court may issue a Writ of Bodily Attachment which will command the Sheriff to pick  up the Judgment debtor and bring him/her to the Judge.  This is a very effective procedure.  At that point, the most uncooperative debtor will usually comply with discovery, or work out payment plan.

Our motto is to be courteous, but never believe what the debtor says.  It should be backed up with documentation.  (i.e. your company is out of business - show us where all the money went through your financial records.)

The following remedies are available to the Judgment creditor:  Attachment and levy, garnishment and other procedures that allow the creditor to execute upon assets in an expedited manner.  

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DOCUMENT IMAGING

We have installed scanning software that completely merges with our collection software.  Every document that enters this office is scanned into the computer; every new file, every letter, and every pleading.  When a document needs to be reviewed, we hit one button and the document appears before us.  As an example of how useful this is, yesterday a client called me and asked me for a status on Return of Service.  I looked on my computer screen and saw that it was a No Service. The client asked what happened.  In the old days, I would yell for the file.  A file clerk would bring me the file and the Return of Service would be missing.  Then the file clerks would have to search through our documents for filing.

Now all I had to do was hit one button on my computer and the Return of Service was on my screen.  I read from the Return of Service and gave my client a complete status.  As you can imagine, we are very excited about our new document imaging software.

Now we even image every outgoing document!

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SUMMARY JUDGMENT

Summary Judgment is a great vehicle to end litigation early. It is a motion directed to the Court stating that there is no reason to waste the Court's time on a full trial. You are asking the Court for a Judgment as a matter of law.

Why is it valuable? First, it gives you two bites at the apple (so to say). The opposing party must file an Affidavit at least two days before the hearing setting forth all of the facts showing why Summary Judgment should not be granted. At this point we get to see all of the Defendant's defenses prior to any possible trial. Second, it cuts out at least some of the cases that would have gone to trial. This saves the creditor the time and expense of attending a trial which may be out of State for the creditor.

Third, it causes the Defendant more time and expense by having to respond and have his attorney appear for the hearing. The Defendant may settle at that point.

In our opinion, a Summary Judgment Motion is a must. Even though many are not granted, if we can cut out even 25% of the creditor's cases before trial, that's 25% of the cases that he or she won't have to appear for at trial.

It is also a great vehicle for settlement. In our office we like to use the theory of pressure points, these are points where the

Defendant may want to pay: (1) when the demand letter is sent; (2) when our collectors start calling; (3) when the suit is filed; (4) when Summary Judgment is filed; and (5) when trial approaches. These are all times when the Defendant is in a mode to strike a settlement. They are fearful of a Judgment being entered.

In our opinion, you should make sure that all of your attorneys file motions for Summary Judgment when appropriate. It doesn't cost you anything. There is no downside.

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REPLEVIN

Replevin in the state of Florida, is an action to recover possession of personal property wrongfully detained, including property identified under a security agreement.  The creditor may obtain possession of the property during the pendency of the suit in two distinct ways.  One requires a bond by the creditor, while the other does not. The main issue in a replevin action is to establish the right to possession of the property in question. Replevin may be useful in the following situations:

1.  The debtor has not paid the full purchase price or has defrauded the seller, enabling the seller to rescind the agreement and repossess the collateral.

2.  The debtor has defaulted on payments and the seller has a purchase money security interest enabling the seller to retake the property sold.

3.  The debtor has defaulted on obligations for which the creditor has a perfected security interest or appropriate lien, enabling the creditor to repossess the property serving as security.

4. The creditor wishes to raise his right of possession to defeat a third party's claim to property, where the third party has taken the property under legal process.

When the sheriff shows up on the debtor's doorstep to turn over the property to the creditor, the case is often resolved quickly.

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POST-JUDGMENT PROCEDURE

The purpose of post-judgment proceedings is to enable the judgment creditor not only to discover assets, but to pay off the judgment as quickly as possible.

Naturally, the first step a creditor must take is to find out exactly what assets, if any, the debtor has.  This is known as Discovery in Aid of Execution.   The Florida Rules of Civil Procedure allow discovery by any of the following methods: depositions upon oral examinations; depositions upon written questions; written interrogatories; production of documents or things, permission to enter upon land or other property for inspection and other purposes.

A deposition upon oral examination is one in which the judgment creditor and the debtor appear in front of a Court Reporter who will take down the questions asked by the creditor and answered by the debtor under oath.  Of course, the questions will pertain to assets the debtor possesses, salary he/she is earning etc. A deposition upon written questions, which is not as common, is one in which the questions are served upon the debtor prior to the deposition and they are answered in front of a Court Reporter.

Written interrogatories are also questions that are provided to the debtor in writing but are answered in writing under oath but not in front of a court reporter.  They are simply mailed back to the judgment creditor's attorney.  The debtor can also be requested to produce items or documents.  For example, a creditor may request copies of income tax returns, savings and bank account statements, title(s) to property or vehicles along with any other documents or things which may lead the creditor to assets that can be executed upon.  Should the debtor own real property upon, the creditor may inspect the land.

If a judgment debtor does not comply with discovery, the creditor may seek an order from the Court compelling the debtor to comply with discovery.  Failure to comply with the Court's order may result in the debtor being held in Contempt of Court.   Should the debtor fail to be "purged" of the contempt, the court may issue a Writ of Bodily Attachment which will command the Sheriff to pick up the judgment debtor and bring him/her to the Judge to show why he or she should not be held in contempt of Court.  This is a very effective procedure.  At that point, the most uncooperative debtor will usually comply with the discovery or work out an acceptable payment plan.

The following remedies are available to the judgment creditor: attachment and levy, garnishment and other summary procedures that allow the creditor to execute upon assets in an expedited manner.  

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SETTLEMENT AUTHORITY

Most of you have received our notes asking for settlement authority at pre-trials in Small Claims Court (under $5,000).  Most Judges are conducting mediations at the pre-trials if the client does not appear in person, and we do not have full settlement authority.   According to the Judges, full settlement authority means that we have full authority to settlement authority to settle for any amount that we believe is in the client's best interest.  This means that if the creditor does not want to come to Florida for the pre-trial in Small Claims cases, they will relinquish some control to the attorney.

PROCEEDINGS SUPPLEMENTARY

Have you ever found that a defendant corporation transferred money to it's owners and then closed up?  Has your local counsel told you that the debtor corporation has no assets but there are loans outstanding and due from officers of the corporation?

Proceedings supplementary to execution is a post-judgment remedy which enables the judgment creditor to reach property that is due the debtor, but is in the possession or control of a third party.  This includes transfers from the debtor to others without valuable consideration (considered a "fraudulent transfer").  In order to do this, the third party is formally brought into the case as a party to the action.   This is referred to as "impleading".  A prerequisite to impleading the third party is the filing of an Affidavit stating that the sheriff holds an unsatisfied writ of execution, that the writ is valid and outstanding, accompanied by the identification of the third party to be impleaded.

After the impleader is accomplished, the court will conduct a hearing on the matter so that the parties' respective positions may be presented.  If it is found that the property belongs to the debtor, the court will then direct the Sheriff to take the property to satisfy the execution.

The costs incurred for having to bring proceedings supplementary are taxed against the debtor, pursuant to Florida Statute.

In brief, the law provides a remedy to a judgment creditor for the purpose of satisfying its unexecuted judgment by permitting the creditor to look to third parties who hold property of the debtor.

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PREJUDGMENT GARNISHMENT
It Works!

This is an aggressive vehicle that works. Very simply, before the debtor even knows you have filed a suit, his bank account is frozen.

There are several prerequisites making prejudgment garnishment a vehicle only for the most aggressive creditors.

First, the client must allege that they have reason to believe the debtor will not have assets by the time a judgment could be obtained. Second, the creditor must post a bond for double the suit amount.

Third, the debtor can hold the creditor liable for damages if the writ was wrongly obtained and the debtor was damaged.

We have had fantastic results with prejudgment writs of garnishment.. The debtor usually settles right away, sometimes within hours.

If the debtor doesn't settle immediately, the money is held by the bank pending the outcome of the litigation

The procedure is as follows: Our office prepares a verified Motion for Prejudgment Writ of Garnishment, Order for Writ and Writ of Garnishment, together with the complaint. We then fax the complaint to the appropriate party for signature and order the bond. The next day the verified complaint should arrive in this office from the client and the bond arrives from the bonding company.

At this point, the bank account needs to be verified for funds. If there is no money in the bank, then prejudgment garnishment is an exercise in futility.

We cut all checks for the clerk and proceed to the courthouse. We file the complaint and ask for an emergency assignment of a Judge. We proceed to the Judge's office and sit until the Judge has time to review the documents. Assuming the Judge agrees, the order is entered. We proceed to the clerk who enters the Writ and we have the sheriff serve the Writ on the bank.

When you think of the normal collection case and the months of waiting for trial, you can see how important an immediate garnishment can sometimes be.

Even if the client chooses not to use the prejudgment garnishment, in applicable cases, consider offering them the choice. They will know that you are aggressive and are looking out for their best interests!

Telephone Testimony
In cases under $2,500.00, the plaintiff can usually testify at trial by telephone!

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