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How to Collect Debt Effectively, Safely, and Legally :: American Rental Association of Georgia

The ARA of Georgia has secured attorney Richard Howe, managing partner of Howe & Associates since 1994, which focuses their practice on debt collection. The firm represents small businesses throughout the state of Georgia and has managed over 80,000 debt collection cases.

  • Founded in 1985
  • Handled Over 80,000 Debt Collection Cases / Very Experienced Collection Team
  • Coverage – Entire State of Georgia
  • Litigate in all Courts in the State:
  1. Magistrate Court ($15,000 limit)
  2. State Court
  3. Superior Court
  4. Federal Court (Northern, Middle and Southern Districts)
  5. Georgia Court of Appeals
  6. Georgia Supreme Court


  • State Bar of Georgia
  • Georgia Trial Lawyers Association
  • Commercial Law League of America
  • American Lawyers Quarterly
  • National List of Attorneys

Types of Creditors represented

  • Insurance Premium Collection – Travelers, AIG
  • Suppliers – Building Supplies, Commercial and Retail Rental, Concrete
  • Contractors – All types including Grading, to Roofing (* The Firm handles more Mechanic’s Lien and Bond Cases than any other law firm in the State of Georgia)
  • Advertisers – Billboard, Television, Radio
  • Law Firms – Considered the “Lawyer’s Lawyer”
  • All Other Types of Debt Collection Cases

Richard Howe, Member of Georgia State Bar Since 1994 – Managing Partner for 19 years, Lead Attorney in over 10,000 Debt Collection Litigation Cases, Litigated Cases in Most Every Court of Each County in the State, Achieved an “AV Preeminent” Rating from Martindale Hubbell

  • Fee Structure – Contingency, “No Collection, No Fee”


Georgia is a “Better than Average” State for Creditors – Favorable Statutory         Scheme

  • Bank and Wage Garnishments / Sheriff Levies / Judgments Attach as Liens against Real Property Owned / Liberal Post Judgment Enforcement Statutes including Contempt for failure to respond to discovery / Favorable Mechanic’s Lien Statutes / Favorable Replevin Statutes

THE “DEBT COLLECTION PROCESS” – Starts Before the Debt Becomes Due

Should begin with a Comprehensive Credit Application, which includes:

  1. Determination of the Exact Legal Entity to whom you are extending credit – (Sole Proprietorship, Partnership, Corporation, or LLC)
  2. Tax Identification Number
  3. Trade name(s)
  4. Location of all offices
  5. Banking Information
  6. Names and addresses of all officers
  7. Personal Guaranty and/or Guaranties
  8. Venue Provision: “It is agreed that venue and jurisdiction will lie in Georgia regarding this transaction”
  9. Stated Rate of Interest – Typical is 1.5% per month
  10. Attorney Fee Provision – O.C.G.A. 13-1-11 states that this must be in writing.  If “reasonable attorneys fees” listed, then 15% of the first $500 and 10% of the balance.  If “15% attorneys fees or greater, then 15% of principal and interest.   Suggested Language: “Any account placed with an attorney for collection will incur 15% Attorney Fees.”  “Interest will accrue at a rate of 1.5% on any past due balance.”  (* If not in the credit application, then on invoices)
  11. NOTE: * Avoid Credit Limits, as they can arguably release guarantors if exceeded.
  • When should a claim be placed with our law office? – “when it is determined that your client has become a debtor – * in any case, be aware of the 90 day deadline from “last delivery of goods” to file a Mechanic’s Lien.




  • Mechanic’s Liens – Liens on Real Property
  • UCC Liens – Liens on Personal Property


MECHANICS LIEN STATUTES IN GEORGIA  – Comprehensive Changes in 2009:

  1. Still Must be Filed within 90 days of Last Delivery
  2. **If Sub to Sub – Must File a Notice to Contractor within 30 days of first work on the job.  NOTE: Should always determine if you client is the General Contractor or a Sub to the GC.
  3. Public Jobs – Cannot File a Lien.  Must depend on a payment bond (Georgia follow Little Miller Act)
  4. Must “Perfect” the lien within one-year from the date the lien was filed by filing suit and recording a notice of lien in superior court.
  5. When approaching the 90 day deadline, contact our office and we will guide you on the lien filing process.
  6. NOTE: * For Rental Goods, must keep accurate records as to the specific location of goods.



Obtain a Security Agreement and File a UCC-1 Financing Statement in order to perfect the lien. (UCC is an abbreviation for The Uniform Commercial Code.)  This code governs commercial transactions between parties.  File the UCC-1 in the Superior Court of the county in which the debtor resides.  That information is then transmitted within 24 hours to the Georgia Superior Court Clerk’s Authority ( who then has 24 hours to add the filing to the Statewide Index.  NOTE:  You will only need to file your UCC-1 in one county in order to receive statewide notification of your lien position.




  1. Simple Placement Process
  •  Completed Placement Form
  •  Copies of the Invoices (or Statement of Account)
  •  Copy of any Mechanic’s Liens.
  1. Set up the claim in Collection Master Software, investigators will begin an asset investigators will begin asset investigation and initial demand to debtor.  No action taken without client approval.  Payment plan or litigation to be determined for every case.
  2. Litigation Process
  • Determine Statute of Limitations – 4 years for Commercial Account or Oral Contract, 6 years for Written Contract from the date the debt “became due”
  • Determine Legal Entity of Defendant, Parties, Guarantors
  • Determine Venue (County)  and Jurisdiction (Court)
  • File Complaint and Perfect Lien (30 Day Notice of Filing in Superior Court)
  • Debtor is served with summons and complaint (by sheriff or special process server)
  • 45 days to file an “answer” with the court
  • If answer filed, discovery period for 6 months, litigate toward “judgment” (Discovery, motions, trial, etc.)
  • If no answer, file for default judgment
  • Counterclaim Considerations
  • Appeal Considerations
  1. Judgment Collection
  • Garnishment and Property Attachment
  • Bank Account Location – (Credit App, Copies of Checks, Bank Locator)
  • Sheriff Levy Demands
  • Written Post Judgment Discovery
  • Post Judgment Deposition with Subpoena to Discover Assets
  • Compel and Contempt Motions for failure to respond to discovery
  1. Other Debt Collection Considerations
  • Bankruptcy – Chapters 7, 11, 13 – Liens remain in effect, active collection must cease, motion to lift stay to replevin on goods.
  • Replevin (aka Writ of Possession) Lawsuits – “Tack and Mail Service”


ACCELERATION OF RENT PROVISIONS – Proceed, but with caution

Article 2A of the UCC Governs. Georgia’s code section 11-2A adopts the UCC.  In the event of default of the contract, Article 2A of the UCC and Georgia law allows for Acceleration Clauses if classified as liquidated as opposed to a penalty. 

“Liquidated Damages” – where the parties “agree” in advance as to what the damages will be in the event of default. Article 2A provides default and remedy provisions in case the parties to a lease neglect to include a liquidated damages clause.

Sample Clause upheld by the Court:

“1. Any accrued, unpaid rent at the time of the breach, plus 2. The present value of the rent for the remainder of the lease term, plus 3. The residual value of the equipment, minus 4. The present value of the net proceeds resulting from the disposition of the equipment.”

Rule of Thumb:

Acceleration of rent clauses that are liquidated damages, as opposed to a penalty, will typically be upheld if the liquidated damages clause does NOT allow the lessor to receive a greater amount than the lessor would have received if the lessee fully performed its required obligations under the lease.