Commercial Debt Collections and What We Do:

Why should we use a collection attorney to help us recover our past due accounts?

It has been proven time and time again that an attorney has more clout with debtors and therefore more success in the recovery. Ask yourself, if you were a debtor would you pay more attention to an attorney or a debt collector? In addition, our fees are competitive and you can get an instant status report on your case from us as opposed to having a large debt collection company attempt to contact their various attorneys.

What will you be doing?

We will open our file upon receipt of your claim information and backup documents and send you confirmation. An agreement on fees and a retainer are essential before commencing any action. Typically the debtor first hears from us when served with the lawsuit documents. We are required by the law to send an initial collection letter and afford the debtor a short period of time (never more than 30 days) to inquire about the debt. After that initial period, we will verify the debtor’s name and location and then commence legal action.

Our goal is to obtain a judgment and then employ the enforcement proceedings available to us under the law to collect the judgment. These procedures include levies on bank accounts, wage garnishment and asset or receivable attachment. A judgment is only as good as the assets behind it and that brings on our next topic-probability of success.

For those interested in the rules and regulations imposed upon the debt collection industry see the Fair Debt Collection Practice Act, which applies to all debt collectors nationally: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf .

What are the chances for collection and when will you collect?

This is the important question, but also most difficult to answer. We sincerely believe that we will give every claim our best effort and that we are specialists in this field. In most cases, since our fee is contingent, we don’t make money until we collect money.

Success rate depends on diverse factors; however, we can get a fairly good idea about the prospects for collection within a short time. The whole process could be rather quick if we obtain and execute on a default judgment. On the other hand, the debtor may delay the process by filing an answer or through discovery or motion practice.

High probability of collection success is often indicated by: age of debt, lavish life style of an individual debtor, operating businesses, excellent credit history, occupational or professional licenses of debtors, supportive family, strong financial statement or substantial asset ownership, history of reliance on obtaining credit, debts under $50,000.

A lower probability of collection occurs in cases that are: very old, against corporations that are out of business, involving contested claims without proper backup documentation, those who are or will be filing for bankruptcy protection, against those people whose lifestyle tends to indicate no assets now or in the future, against those with huge debts or poor credit history with many judgments.

Are you able to help us with out of state claims?

Yes, Cohn & Cohn, P.C. is affiliated with collection attorneys in every state.

Will you settle the claim?

That is your decision. We will speak to you about the reason the debtor has asked to settle and we will give our reasoned and experienced opinion under the circumstances. No two cases are the same.

As far as installment payments are concerned, we always demand full immediate payment. Unfortunately, installment payments may be the only way to collect your money. Something is always better than nothing. If the situation arises in which it is apparent that a debtor must make installment we will take the necessary steps to assure that payments remain timely and that appropriate legal protections in the case of default are in place

What cases do you accept?

We first want to see that you have provided a clear and concise breakdown of the nature of the debt. If the debtor can be found, we will generally take the case. We take the majority of cases on a contingency basis. In that situation, there is no fee unless we collect. You are responsible for our out-of-pocket expenses for court filings, summons service fees and marshal/sheriff costs, which usually run up to about $100.00. Expenses may run higher for larger claims (generally $25,000.00 and up). The typical case will be handled within the initial cost deposit. Any subsequent costs are similarly minor. If the case proceeds all the way to judgment, there may be minor charges for recording liens, obtaining orders for court appearances, and for the sheriff to seize a bank account. If we are required to seize major assets (such as cars, land, etc), which may require higher costs to the sheriff or others, we consult with you first for approval of any significant expenditure. You will be contacted before any disbursements are expended. We request you show your confidence in your case by providing the necessary funding for the minor costs and expenses. A minority of cases is taken on an hourly fee basis but that is not the usual situation.

We can try to collect any debt involving a New York debtor or a debtor with assets in New York. You do not have to be in New York yourself.

What personal involvement will I have?

When we get a new file, we conduct our investigation and file initiation. As part of that process, we will call and interview you on the phone for relevant facts, information, ideas, and tactics. We try to develop a feeling for who the debtor is and what the best way is to approach the collection process.

We typically don’t require an initial meeting with our clients as there is no need on our part to hold a face-to-face interview in most cases. You are not required to visit our office or travel. Of course if you wish to meet us, face-to- face, you may schedule a brief appointment after your case has been accepted and acted upon to review progress. We will contact you upon any substantive contact with the debtor whether it be a denial of the debt, a request for further clarification of the debt or an offer to settle.

How do you disburse proceeds from my collection?

All money collected is deposited to our “clients trust account”. After we are certain that the debtor’s payment has cleared, the money is disbursed to you and to us. We don’t get paid on contingent fee cases until you do. We are anxious to clear funds and disburse promptly and we usually disburse all cleared funds bi-weekly.

The New York State Bar Association has rigid and inflexible rules governing trust money. It must be held for the benefit of the client only and no commingling or inappropriate use is allowed. All of your funds are fully insured and held in FDIC designated beneficiary accounts.

What if you can’t collect for me?

While we collect on most of our cases, in the history of our practice there have been some cases where we can’t collect. Since collection is our business, cases are our inventory. We don’t want stale inventory or non-current inventory. If we are unable to collect, your case will be returned to you promptly. If your case is returned to you, you can take it to any other lawyer you select and we will relinquish any contingent fee interest. If we don’t feel we can collect, we don’t want to keep the case and continue devoting time toward it without optimism.

Our only exceptions to waiver of contingent fees, if you request your case back after giving us a chance to attempt collection, is (as stated in our retainer statement) when we are still actively pursuing a case and collection prospects are good or when a client directs us to discontinue for their own benefit, such as when the client has made a direct settlement and tries to avoid payment of our earned fee.

Can I collect your fees from a debtor?

The general answer is no. Unless there is a contract with the debtor in which they promise to pay reasonable attorneys’ fees, then nothing can be added to your claim. Sometimes we are able to recover costs and interest after the entry of a judgment.