Collecting debt is a monumental job that requires knowledge of the federal laws and the ones governing Massachusetts. When your company is owed money, it affects your bottom line. The longer these debts go unpaid, the less likely you are to collect these receivables. A skilled attorney handling these debts can save time and money. While the collection laws from business to business are not as stringent, the ones regarding collecting from the average consumer are very detailed. For instance, did you know you can’t call a debtor before 8 a.m. or after 9 p.m. without their permission? Since the law has so many little nuances, it pays to have someone skilled in such things assist in the process. Debt recovery efforts must be efficient and compliant with all regulations, so our debt collection process is customized to ensure success.
In-depth Exploration of Legal Remedies for Debt Recovery
The debt recovery process is lengthy. It all begins with a demand letter. Once an account hits the 30-day mark, sending these letters is best. Don’t wait until 90 days past due before sending a written communication, as this wastes valuable time. If the case escalates to court, the formal demand letter becomes a significant part of the lawsuit. The court will analyze your collection efforts and ensure you gave the debtor every opportunity to respond. The letter’s details, including the amount owed, interest or late charges, and the original due date, are crucial. You can also begin recovery by making collection calls to the debtor. Calling becomes tricky when the person won’t respond or becomes hostile to your efforts. Numerous laws protect debtors, so it’s best to familiarize yourself with them before dialing. Additionally, the rules can change over time, so staying well-versed in these regulations is imperative.
Lawsuits, Judgments, and Garnishments in Massachusetts
If phone calls and demand letters haven’t got you any closer to collecting the debt, it’s time to escalate the collections process. The next step is to file a lawsuit. If the debt is under $7,000, you can file it in small claims court. The benefits of using the small claims division are that the process is more straightforward, and you can resolve your cases faster. Once you file a complaint, a hearing is scheduled. You’ll need to explain the situation to the judge and make sure you bring any supporting documentation. It’s important to note that the debtor is legally required to appear. If they fail to do so, you will likely win the case by default. The judge then issues an official ruling. For debts exceeding $7,000, the filing must be made in the district or superior court.
The court where you should file your case depends on the amount owed. For larger debts, the process becomes more formal. You’ll need to file a complaint and serve the debtor with a summons, and if they contest the case, a trial may be necessary. When you win a claim that the debtor refuses to pay, you can take payment arrangements documented by the court or file a garnishment. Wage garnishments in Massachusetts aren’t always an easy task. You can only take 15% of the debtor’s disposable income, and Social Security and other types of income are exempt.
Another option is to file a bank levy. You can freeze or seize the funds from the debtor’s bank account, but they must have proper notification so they can claim any exemptions they might be granted. Lastly, you can put a lien on any real property the debtor owns. Before this property can be sold, the lien must be satisfied. The legal process can be exhausting, especially if you have several past-due customers. Letting a professional collection agency or law firm handle such claims is always better.
The Role of the Court System in the Debt Collection Process
The court plays a crucial role in the debt collection process. It provides a structured and legal framework for creditors to seek repayment from debtors who have defaulted on their obligations. First, you can take someone to court who owes you and collect your funds. However, most people don’t have the amount owed that they can quickly pay, so the court steps in and assists with the collection’s activities. The court also protects the debtor from an unfair collection process and protects the lender to protect their interests.
Legal Tools Available to Creditors in the State
Massachusetts offers creditors comprehensive legal tools to help you recover debts. However, understanding and effectively utilizing these tools and being compliant with state and federal laws can be overwhelming. It’s best to seek legal advice to help you navigate the complex nature of the debt collection process. You want to ensure that your actions are within the confines of the law, or your debt may be deemed uncollectable. At Goldberg & Oriel, we want to help you navigate the process from demand letters to garnishments. Since we dedicate our practice to collections and adhere to Massachusetts collection laws, we can ensure compliance. For more information about our services or to schedule an appointment, please contact us..