Michael L. Feinstein, P.A.

How can creditors attempt to collect on past-due balances?

When a person buys something on credit, the expectation is that person will pay it off over time according to the terms of the agreement. When that person fails to meet his or her financial obligations and does not pay on time or at all, there are legal options available to the creditor. A Florida company owed money has the right to take certain actions that will hopefully compel the debtor to pay. 

Sometimes, it is necessary to get an attorney involved in the process of collecting on debt. As a creditor, you may need external support to protect your rights and fully engage in the process of collecting money owed to you. You may also benefit from having assistance in the process of negotiating a fair deal when a debtor is unable to pay in full.

Options for creditors

With some collection options available to creditors, you must have a court's approval to move forward with an action against a debtor. However, you can take certain actions on your own, known as self-help remedies. An example of this is when you simply contact a debtor and request payment.

Another example of a self-help remedy is employing the services of a debt collection company. These companies contact the debtor on your behalf seeking payment. There are tight regulations on the actions debt collection companies can take, including when they can call and what types of contact they use.

Turning to the court for help

When other options do not prove to be successful, you may determine that it is appropriate to initiate court proceedings against a debtor. Under certain circumstances, the court may approve a reasonable way to recoup financial losses, such as reclaiming property bought on credit through replevin or attachment. In some cases, it may also be appropriate to sue the debtor in order to secure repayment of debt.

The last resort

If none of the other options available to creditors result in a repayment of money owed to you, it may lead to an involuntary bankruptcy. This happens in cases where a debtor owes money to many creditors at the same time. During the bankruptcy process, assets may be sold to repay debts, or the debtor will have to follow the terms of a repayment plan to pay back at least some of what he or she owes.

Fighting for payment

It's not easy for a creditor to fight for repayment, and for smaller businesses, it is crucial to get payments as soon as possible. Every company has the right to collect on past-due payments, and you may find it beneficial to work with an experienced attorney as you explore the various collections options available.

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