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Anatomy Of The Collections Process:  An Overview With Efficiency Tips From A Seasoned Collections Lawyer

A. Address Service.  

Correspondence sent to a debtor’s address marked “Address Service Requested” will result in the correspondence being forwarded to the debtor (if the forwarding order has not expired) and a notice with the forwarding address to the sender.  Even if the forwarding order has expired, the envelope will often be returned with a forwarding address label containing the new address.

B. Driver’s License Checks.  

The individual’s name, date of birth and driver’s license number submitted to the Department of Public Safety will produce a report containing the last address submitted to the Department of Public Safety.  A relatively cheap internet service, PublicData.com, provides driver’s license searches by name and driver’s license numbers.  It also includes voter registration and criminal record information.

C. Licenses.  

Licensing boards often have current addresses for their licensees and a variety of other identifying information is available. Some professional licensing boards have website access to the information.

D. Credit Reports.   

If the creditor has permission (usually included in the credit application) to run a credit report, updated reports at the time of referral can be useful if the debtor’s address is unknown or uncertain.

E. Property Records.  

Appraisal district records, or at least contact information for same, can be accessed online. In addition, some counties provide web access to filings in their Official Public Records.

F. Corporate Information.  

Corporate information on file with the Texas Comptroller can be accessed at http://ecpa.cpa.state.tx.us/coa/coaStart.html.  This information may be dated.  Before filing suit on corporate debts, it is advisable check with the Secretary of State’s office for registered agent/office information. (512) 463-5555 or online at SOSDirect, http://www.sos.state.tx.us/corp/sosda/index.shtml.

G. Internet Search Services.  

A number of services are available including: Accurint, CompuServe, Lexis-Nexis.com, Westlaw, Ussearch.com, knowx.com, and others referenced above.  If you don’t regularly need to track down debtors, a number of services or investigators may be hired on a one time basis to locate the debtor.  

H. Old Fashioned Tools.  

Don’t overlook the phone book, directory assistance, criss cross directories, and a visit to the court house to peruse public records.

VI. Debtor Identity and Multiplying your Defendants.

Tip:Even if the client was not careful to determine up front to whom credit was extended, the effective collection process begins with identifying the debtor and determining if any additional persons or entities should be invited to “the party.”

A. Individuals.  

Suing individuals is pretty straightforward.  With complete client information you will hopefully know if you are suing John Doe, John Doe, Jr., or John Doe, Sr.  If your debtor, Bill Brown, is actually William A. Brown, Jr., it is always preferable to sue him using his full legal name.  Property records, driver’s license information and credit reports may help in this determination.  You may even want to name the defendant: William A. Brown, Jr. aka Bill Brown.  Never assume that your client has given you the correct names or spellings for the defendant.  Their records may be based on a handwritten credit application or illegible signature!

Always ask your client if their file contains a personal guaranty.  Debts personally guaranteed are often more quickly paid than those that are not.

B. Sole Proprietorships.  

The sole proprietor or owner of a business is liable for the debts.  Hopefully, your client has obtained that person’s signature on the application (and contract or order form if in writing).  Receptionists, bookkeepers and delivery personnel are seldom authorized to bind the owner and rarely have even provable apparent authority. If the owner of Joe’s Antiques is not readily apparent from the file, a search of the assumed name records may be in order.  Also, the Texas Comptroller of Public Accounts will have sales tax information, which will in turn provide owner identity.  It is a better practice to sue “Joe Smith dba Joe’s Antiques” than “Joe’s Antiques.”

C. General Partnerships.  

Any partner can bind a general partnership in the ordinary course of business and all partners are thereby jointly and severally liable for the debt.  Sometimes the identity of all of the partners is not readily determined.  Your clients should be advised to obtain

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