How to choose a business debt collection attorney in metro Atlanta, Georgia.
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This video explains how important customer service is to Howe & Associates. Customer service is an important consideration before choosing a debt collection attorney.
They want to know what’s going on with their case at every step of the way. Every collection case that we handle, our clients want their money but just as importantly, they want to be informed. They want to be educated on the process; they want to understand what we’re doing every step of the way. Our process prides itself on educating and informing them of every possible solution in every single case.
There’s help to landlords seeking collections on their past due or delinquent rent payments in Georgia. Reviewing some of the steps their debt collection firm takes to prepare and collect on bad debts, is the video topic in review today.
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We’ve been in business since 1985 and we’ve handled thousands of cases representing landlords seeking collections on their past due or delinquent rent payments. We are commonly working with them. There are a lot of things that go into the collection process for past due rent payments.
We want to obtain a copy of the lease documents. There are a lot of things in the lease that can help you and serve as a tool for collecting your debt. We’ll take a look at the lease and see what’s in there.
Georgia has provisions that will allow you to add cost of collection and attorney fees if you are required to use an attorney to collect the debt.
We also help new clients make improvements to their existing lease agreements from a debt collection standpoint. Many times you get your rental lease agreements written by an attorney however they might not be a debt collection attorney and not incorporate elements that make the debt collection processes much smoother, faster and reliable. We can add those things into the agreements that will help you collect your debts faster if the renter fails to pay their agreed upon fee.
Demand letters are the first step to collecting a bad business debt in the state of Georgia. Richard, a managing partner of Howe & Associates has a system that they have refined from over 30 years experience to collecting debts with demand letters.
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Whenever we get a new debt collection claim we always set up the claim in our system and conduct a thorough investigation. We will then send a series of demand letters.
We will always send an initial demand letter to the debtor to let them know that we’ve been retained by the client. We will also send an acknowledgment letter. In those investigations we will determine assets that we will be able to attach with our judgment.
The series of demand letters that we send really depends on each case. We make demand calls. We want to talk to the debtor and find out exactly what their intention is with regard to payment.
We will also send a series of demand letters which will help us determine a lot of things. This could include the debtors interest in wanting to amicably take care of the debt or help us determine they are going to avoid it and we should just go on ahead and file suit on it.
The demand letter process in the collection overall process is very important component in debt collection.
How can you go about collecting past due loan payments in Georgia? Richard shares some insights into recovering past due loan payments in today’s video.
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What is the difference between a debt collection law firm and debt collection agency? Richard clarifies a commonly asked question regarding collection agencies and lawyers.
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A collection agency will make demands on the debtor. Often times clients will give a delinquent debt to a collection agency so that they can make demands on the debtor. They will then send demand letters and make demand calls.
The advantage that a collection law firm can provide over a collection agency is that we can provide all of those procedures.
The fact that the debtor gets there first contact directly from a collection law firm as opposed to a collection agency has more impact with the debtor. In addition to that, we can file suit. While we do have collectors on staff and our law firm and the attorneys do make demands, we have the ability to file a lawsuit. Most often filing the law suit is what’s going to result in the recovery the debt.
Georgia has a very strong pierce the corporate veil statute and allows you to pierce the corporate veil and go after the shareholders or officers individually.
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When a corporation incurs a debt there is no personal liability. In other words, that’s the idea of the corporate shield. It says that if you’re a corporation and you incur debts then the officers or shareholders are not personally liable for the debt.
When Can We Proceed with A Pierce the Corporate Veil Action?
Our office, whenever we have a business debt collection matter, we never really stop at the point where a debtor says we are insolvent or we’re defunct. We always dive into it, we bring them in for depositions, we force them to reveal whatever assets they have. At that time we determine whether or not we can proceed with an action to pierce the corporate veil.
Piercing the Corporate Veil in Georgia
Georgia has a very strong pierce the corporate veil statute and allows you to pierce the corporate veil and go after the shareholders or officers individually. It allows us to go after their individual assets. If they did not fund the corporation properly or they commingled funds we can go after the officers and shareholders individually.
Insolvency & commingling are two of the most common reasons and weapons to be able to pierce the corporate veil and hold a shareholder liable.
Howe and Associates was founded by Karl Howe in 1985 and has since become the authority regarding debt collection cases in metro Atlanta. Karl has spent his professional career as an experienced trial attorney representing thousands of plaintiffs throughout the entire state of Georgia. Richard Howe, a native of Atlanta, Georgia, has been the lead attorney representing plaintiffs in over 7000 litigation cases.
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Karl and Richard Howe are happy to be located in Georgia, serving the greater metro Atlanta area.
- Howe & Associates in Atlanta, GA
- Howe & Associates in Atlanta, GA
- Howe & Associates in Atlanta, GA
- Mike Bodker – Mayor of Johns Creek & Richard Howe
- Bradon Beach – President of the Greater North Fulton Chamber of Commerce and Richard Howe
An “AV” Rating by Martindale-Hubbell, the oldest and most established legal directory in the nation. This rating, which is bestowed upon only a small percentage of attorneys nationwide and only those with at least 10 years of legal experience being considered as candidates, is classified as “preeminent”, and is in fact the highest rating available.
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.
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- 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:
- Magistrate Court ($15,000 limit)
- State Court
- Superior Court
- Federal Court (Northern, Middle and Southern Districts)
- Georgia Court of Appeals
- Georgia Supreme Court
Memberships:
- 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”
DEBT COLLECTION IN GEORGIA
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:
- Determination of the Exact Legal Entity to whom you are extending credit – (Sole Proprietorship, Partnership, Corporation, or LLC)
- Tax Identification Number
- Trade name(s)
- Location of all offices
- Banking Information
- Names and addresses of all officers
- Personal Guaranty and/or Guaranties
- Venue Provision: “It is agreed that venue and jurisdiction will lie in Georgia regarding this transaction”
- Stated Rate of Interest – Typical is 1.5% per month
- 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)
- 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.
LIEN CONSIDERATIONS
- Mechanic’s Liens – Liens on Real Property
- UCC Liens – Liens on Personal Property
MECHANICS LIEN STATUTES IN GEORGIA – Comprehensive Changes in 2009:
- Still Must be Filed within 90 days of Last Delivery
- **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.
- Public Jobs – Cannot File a Lien. Must depend on a payment bond (Georgia follow Little Miller Act)
- 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.
- When approaching the 90 day deadline, contact our office and we will guide you on the lien filing process.
- NOTE: * For Rental Goods, must keep accurate records as to the specific location of goods.
UCC LIENS STATUTES IN GEORGIA
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 (www.gscccca.org) 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.
THE DEBT COLLECTION PROCESS – With Howe & Associates
- Simple Placement Process
- Completed Placement Form
- Copies of the Invoices (or Statement of Account)
- Copy of any Mechanic’s Liens.
- 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.
- 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
- 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
- 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.