Initial Communication with the Commercial Debtor

Commercial debts are not subject to the Fair Debt Collection Practices Act and so our first communication with the commercial debtor often is through the service of process where a Sheriff, Constable or private process server, personally delivers a copy of the lawsuit along with Citation to the business debtor’s designated representative. However, there are circumstances in which our clients believe that an ongoing business relationship is still salvageable and, therefore, a demand letter may be the better route to take and make one last attempt to resolve the debt prior to filing a lawsuit. Each case is different and we will discuss all options with the client prior to the initial communication to determine the fastest way to get the unpaid debt resolved.

The Petition

If the decision is made to proceed to a lawsuit, we prepare the initial document to be filed in the case, which in Texas state court is called a Petition. The Petition sets forth notice of the claim against the defendant commercial debtor and asks for an award of the amount owed plus attorneys’ fees, court costs, pre and post judgment interest. The clerk of the court prepares and attaches to the Petition a Citation which explains to the defendant, among other things, that a written Answer is due on or before the expiration of 20 days from the date the defendant was served with the lawsuit. As discussed above, the defendant is then served with the lawsuit by Sheriff, Constable or private process server. If multiple attempts are made and service is unsuccessful but the server can verify that a substitute method of service of process can give the defendant notice of the Petition, then we can file a motion with the court for such relief under Texas Rule of Civil Procedure Rule 106(b) which provides as follows:

(b)Upon motion supported by affidavit stating the location of the defendant’s usual place of business or usual place of abode or other place where the defendant can probably be found and stating specifically the facts showing that service has been attempted under either (a)(1) or (a)(2) at the location named in such affidavit but has not been successful, the court may authorize service (1) by leaving a true cope of the citation, with a copy of the petition attached, with anyone over sixteen years of age at the location specified in such affidavit, or

(2) in any other manner that the affidavit or other evidence before the court shows will be reasonably effective to give the defendant notice of the suit.

The Answer

Cases are often resolved after service of the Petition when the defendant realizes it must now hire an attorney to defend the lawsuit. If the defendant does not file an Answer within the time allowed by law, we will file a motion for default judgment, obtain the judgment and begin the judgment collections process.

However, if an Answer is filed that puts certain of the Plaintiff’s allegations at issue, the lawsuit proceeds to the discovery phase. During the discovery phase, each side is allowed to take depositions, obtain documents and serve written questions. During the discovery phase we will usually move for a summary judgment under Texas Rule of Civil Procedure 166a. If we are unable to resolve the case at this stage, the case will proceed to trial.

The Judgment

Judgments are “alive” in Texas for a period of ten years from the date of rendition, unless executed upon or revived, and once the Judgment has been obtained, it is usually filed with the appropriate county clerk in order to enable a marshal or sheriff to perform property executions and to establish a lien on real property. Judgment Liens on real property are in effect for ten years from the date the Judgment is filed and indexed in the county clerk’s office, in the county where the real property is located unless the Judgment goes dormant prior to ten years.

If an acceptable payment arrangement cannot be made with the commercial judgment debtor, we then begin post judgment collection efforts.

We handle commercial debt collection and debt collection defense, for businesses across the nation that have matters residing in Texas. To speak with a knowledgeable, dedicated, and aggressive attorney, Call (214) 880-9988 (Dallas) or (210) 550-1123 (San Antonio) for a free consultation today! Flexible and innovative fee arrangements are available.  Please contact us toll free at 800 589-1413