1. Demand Letter
DLBPC will send a demand letter to the debtor(s) who owe(s) the money to our client. The letter will contain the following, if applicable:
It is important to note that after the client refers the claim, all communications with the debtor must be made through DLBPC in order to maximize recovery. The debtor will try to contact the client at various times in the collection process and try to negotiate a lesser amount. If the client develops a reputation for willingness to reduce amounts in this manner, it will compromise the entire collection process.Prior to recommending litigation, DLBPC may make additional contact with the debtor, either through letters or telephone calls, to attempt to collect prior to filing suit. This could minimize costs to the client.
2. Litigation
1. Complaint/Lawsuit
Should the debtor refuse to pay within the time provided in the demand letter, or any extension given in additional letters or telephone calls, the attorney (either DLBPC or an attorney selected by DLBPC) will file suit in the jurisdiction where the debtor is located. It is important that the client provide the names of all persons involved in the claim - particularly any persons who have guaranteed payment, or have benefited from any account. This information will enable DLBPC to sue all parties and/or entities responsible or from whom the debt may be recovered. DLBPC, for the client, may request the following damages:
- Actual damages; Legal interest from the date of the claim for amounts both before and after any judgment; Attorneys' fees (if there is an attorneys' fees provision in any contract with the debtor); and
- Court costs.
2. Pre-Trial Discovery
Should the debtor file an answer to the Complaint, DLBPC will engage first in written discovery:
- Interrogatories; Request for Production of Documents; and
- Requests for Admissions
to obtain from the debtor as many admissions of liability as possible. These admissions will make it easier for DLBPC to get a summary judgment in favor of the client and against the debtor.For many claims, depositions are advisable. In most cases, only one deposition would be necessary - that of the primary person responsible for the debt. On occasion, there may be additional depositions which are needed. If the claim is litigated on a contingent fee basis, the client is only be responsible for the costs of the deposition, which are the costs of the court reporter and any travel time and witness fees.
3. Judgment
DLBPC will attempt to obtain a money judgment for all claims which are not settled as follows:
(1) Default Judgments
The client is usually entitled to
a default judgment (that is, a judgment without the taking
of evidence) when the debtor fails to answer the complaint.
When the amount demanded in that complaint is in a fixed
or "liquidated" amount,
there should be no need for the court to take evidence
to establish the amounts due.
(2) Motions for Summary Judgment ("MSJ")
DLBPC can file on behalf of clients an MSJ in any case after the debtor answers the complaint. In some cases, an MSJ will enable us to obtain a judgment even after the debtor files an answer, and will take significantly less time than taking the case to trial.
4. Trial
In the remaining cases, DLBPC may conduct a trial to attempt to establish the debtor's liability. Witnesses will be (1) an employee of the client who can testify regarding the entire file in the matter; and (2) any fact witnesses which the client may have who knew or know the debtor personally and had actual contact with the debtor.The former will be absolutely necessary, and the latter advisable in some cases. In some larger, contested cases, an expert witness from outside the client's offices may be necessary, but only in limited circumstances.
5. Post-Judgment Collection
In those cases where, even after judgment, the debtor refuses to pay, the attorney will engage in post-judgment efforts to collect the claims.
(1) Securing the Client's Interest
In all cases, a judgment will entitle the client to an appropriate writ of fieri facias. These writs will secure the client's interest in the debtor's real property for a certain amount of time and enhance the recovery possibility. For example, in many jurisdictions, if the debtor owns real property, and the client's writ is properly recorded in court records, the debtor will be unable to sell or refinance the real property until the client's debt is satisfied.
(2) Post Judgment Asset Investigation
DLBPC can also obtain credit reports on the debtors against whom judgment is entered. The state Department of Motor Vehicles in many states will give information on the debtor's ownership of an automobiles against which DLBPC can levy on the client's behalf. These reports frequently reveal the location of assets upon which to levy or to garnish.
(3) Post-Judgment Discovery
After judgment is issued, DLBPC may engage in post-judgment discovery efforts, including written interrogatories and the taking of post-judgment depositions. Through these procedures, the debtor is required to give information regarding his/her/its assets. DLBPC will attempt to levy on those assets to collect the amounts of the claim.
(4) Garnishment
DLBPC may file garnishment actions in some jurisdictions on behalf of the client to garnishee:
- Depository accounts of the debtor; Wages of the debtor to the extent the debtor has gainful employment; or
- In some cases, insurance or bonds against which claims can be made.
(5) Liens
In a few cases, there may be pre-judgment and post-judgment, statutory liens which the attorney may file on behalf of the client to obtain a security interest in certain property or the debtor's assets. This might occur in cases involving a debtor who is the trustee of a trust, the executor of a will, or analogous situations. The attorney might be able to foreclose on such liens, and attempt to levy or garnish assets.
(6) Levy
After judgment, our client can levy upon assets of the debtor, such as automobiles and equipment. Our client would be entitled to keep the proceeds of any legal sale up to the amount of our client's claim plus interest.
6. Bankruptcy
In some cases, debtors may file bankruptcy cases in the United States Bankruptcy Court seeking to discharge the claim, or to reduce it significantly. DLBPC may represent our clients in those bankruptcy cases, including filing proofs of claims where the debtor is liquidating assets, and in some larger cases, objecting to the discharge of the debtor's debt. Due to the questionable nature of recovery from a debtor after the filing of a bankruptcy case, DLBPC will handle any additional bankruptcy matter on a case-by-case basis, independent of the percentage based claims recovery structure.
7. Fee Disbursement
All amounts recovered in contingent fee matters through these efforts by DLBPC will be treated as follows:
- Held in that DLBPC's trust account with our client responsible for costs; and
- The balance will be remitted to our client.
