What is the first step in the collections process?2018-11-08T20:31:24-06:00

The first step in the collection process is for the attorney and holder of the debt to have a conference to discuss the debt. This can either be by phone, email or in person. Because many of our clients maintain offices outside of the State of Texas and need help collecting a debt from a business that has its primary place of business in Texas, we usually start communications by email and schedule a phone conference to have a detailed conversation where follow questions can be asked by the client and one of our attorneys. During the conference we determine the best way to go about beginning the collections process and gather information regarding the debtor business (such as how the business debtor is formally organized, in what county or counties the debtor business maintains offices or facilities), the type of debt (whether the debt is for services rendered or products delivered and whether the debt is secured by collateral or if the debtor business is holding any property subject to a lease agreement), the amount of time the debt has been past due, any excuses the debtor business has given, any exposure the creditor business may have concerning counterclaims, the current state of the relationship between the two parties to determine whether that relationship can be salvaged moving forward to maintain future business opportunities (there are some circumstances where the debtor business had unforeseen circumstances beyond its control arise that absolutely prevented it from making timely payments. While this is not the business creditor’s problem, it may make the most sense to take a more compromising approach toward the resolution of the outstanding debt and get the business on an acceptable payment plan rather than push the business over the edge and into bankruptcy), the current financial condition of the debtor business (whether the business debtor is still in good standing with the secretary of state and is currently conducting business operations or whether there are any known assets of the debtor business such as real property or bank accounts. There are certain circumstances in which the officers and directors of a corporation will become liable for the debt of the corporation if the debt was incurred by the corporation after the corporation lost its good standing status with the Secretary of State of Texas), whether there are any personal guaranties on the debt and any other relevant information concerning the debt. We will also request certain information concerning evidence of the debt including any written documentation readily available. Typical documents we like to review include purchase orders, contracts, promissory notes, emails, cancelled checks, receipts or any other documentation that evidences the debt or agreement between the parties or prior negotiations or offers between the business debtor and business creditor to resolve the debt.

During the conference we also discuss the fee structure that makes the most sense given the amount of debt owed to the business and the services to be provided to achieve the fastest possible collection of the debt. Finally, we will discuss the entire debt collection process so the client understands the various means by which we can attempt to collect the debt or judgment and the legal processes available to assist us.