Thursday, March 22, 2012

Garnishment of Reverse Mortgages

When garnishing the assets of a judgment debtor, it is not unusual for several parties to come forward and claim an interest in the assets that are the subject of the garnishment. When a bank account is the target of the garnishment, the bank itself will often claim a superior interest in the monies held by that bank. The law usually supports the conclusion reached by many Courts that the bank stands superior to the judgment creditor who initiated the garnishment action.

However, just last week in a garnishment proceeding directed at a bank, the Appellate Division of the New Jersey Superior Court ruled in favor of the judgment creditor and disagreed with the arguments made by the bank and its customer. In an unusual and clever garnishment proceeding, the judgment creditor sought to intercept payments from a bank to its customer pursuant to the terms of a reverse mortgage agreement. The New Jersey Superior Court held that the monthly reverse mortgage payments from the bank to the debtor are properly deemed debts due to the judgment debtor and could be garnished by the judgment creditor. Cameron v. Ewing, Docket No. A-3628-10T2 (N.J. Super, March 8, 2012). The court rejected arguments advanced by both the debtor and the bank that the payments were in the nature of a loan that had to be repaid and therefore constituted an obligation due to the bank, not a payment from the bank to the judgment debtor. As a result of this ruling, the bank will be compelled to pay the judgment creditor the monthly payment due the debtor under the reverse mortgage until the judgment debtor’s death. As a practical matter, the bank will be forced to recover its money from the collateral and judgment debtor’s estate instead of the judgment creditor.

In reaching its decision, the New Jersey Court rejected the bank’s argument that the reverse mortgage contained a non-assignment clause. The court stated: “[a]bsent a statutory exemption or other clear countervailing public policy, the non-assignability rule does not extend so far that it shields from execution and garnishment payments from a source the judgment debtor created.”

The language in the holding of the New Jersey Court decision provides fertile ground for extending the argument to reach other lines of credit such as home equity lines or any revolving credit instrument that permits a judgment debtor to accrue increased liability to a bank in exchange for cash. Applying the logic and reasoning of the New Jersey Court, the fundamental question to be decided in garnishment proceedings will be whether the bank is placed in a different economic position by paying the judgment creditor. In the case of a reverse mortgage, the answer determined by the Court was clearly “no”. Through the reverse mortgage the bank anticipated making monthly payments in exchange for a lien on the judgment debtor’s property (collateral). It was understood by the bank that the collateral would be used to satisfy the obligation owed to the bank upon the death of the judgment debtor. Payment to the judgment creditor through the garnishment is equivalent to the bank paying the same amount of money over time as it would have to pay to the debtor over time and in the end the bank still can enforce the lien on the judgment debtor’s property that was put up as collateral.

The analysis of the New Jersey Court could easily apply to a home equity line of credit depending upon the terms and conditions of the underlying credit agreement. Essentially, the New Jersey Court is suggesting, at Gross & Romanick, P.C. we think correctly, that a garnishment action against a bank cannot make the bank worse off than it would have been absent the garnishment, but similarly, cannot be utilized by the bank to improve its economic position.

The bank is an innocent third party in a dispute between a judgment creditor and a judgment debtor. And, the bank should be protected from harm in a garnishment action. However, a bank should not be able to receive a windfall and benefit just because the judgment creditor has filed a garnishment action against the judgment debtor. The New Jersey Court ruling is consistent with a ruling out of the District of Columbia which applied the same logic to garnishments and security interests. However, the discussion of security interests and garnishments is a topic reserved for our next posting.

Friday, December 2, 2011

What is a Garnishment?

In the process of collecting a judgment, it is common to utilize garnishments. Commonly used phrases, such as “garnishing wages” or “garnishing bank accounts”, do not accurately describe the legal procedure. More accurately, a garnishment is defined as a suit by the judgment debtor in the name of the judgment creditor against a third party (garnishee) for the purpose of recovering intangible assets owned by the judgment debtor. Butler v. Butler, 219 Va. 164 (1978). This is obviously a very dense definition that needs to be parsed.

First, a garnishment is a suit by the judgment debtor against the garnishee. Although a judgment creditor will file the garnishment paperwork, the question in a garnishment action is whether the garnishee is holding some asset of the judgment debtor. Just as a person may sue to recover monies owed to them, a garnishment allows a judgment creditor to effectively assume a judgment debtor’s rights to such monies. Accordingly, if the garnishee owes money to the judgment debtor, the judgment creditor can utilize a garnishment to intercept that money.

One important reason to define a garnishment as a suit by the judgment debtor is jurisdiction. The relevant inquiry in a garnishment action is not whether the garnishee owes the judgment debtor property within the jurisdiction, but rather, if the judgment debtor sued in that jurisdiction, could they recover the money owed to them? Phrasing a garnishment as a suit by the judgment debtor thus makes the only relevant jurisdictional issue whether there is jurisdiction over the garnishee and avoids the question of whether there is jurisdiction over the particular property. Therefore, under Virginia law, the question is not whether the judgment creditor can convince the garnishee to admit and allow access to the judgment debtor’s funds. Rather, the question is whether the judgment debtor could obtain a judgment against the garnishee in a Virginia court if it chose to enforce its debt obligations here. See, Harris v. Balk, 198 U.S. 215 (1905); Marcus, Santoro & Kozak, P.C. v. Hung-Lin Wu, 652 S.E.2d 777 (Va. 2007).

The other part of the garnishment definition that requires some level of detail is the concept of intangible assets. Seizure of tangible assets, such as a house, car, etc. requires the use of a different collection proceeding. An asset is intangible if it lacks a physical form. Consider the typical bank account. Most banks do not hold their customer’s money in a large mattress somewhere in a back room. Typically, bank accounts are simply payment obligations that a bank owes to its customers. Thus, a garnishment can attach the payment obligation if not the actual money. Similarly, wages and salary represent a payment obligation from employer to employee. There is no physical asset. Accordingly, a wage garnishment can reach the payment obligation that the employer owes to its employee thereby intercepting the money actually required to be paid on payday. However, there are a wide variety of intangible assets beyond bank accounts and wages. Contract payments, account receivables, stock certificates (in some circumstances), certain types of inheritance rights, trust payments, and mineral rights constitute just a short list of some other types of intangible assets that can be subject to garnishment.

An experienced judgment collection attorney can analyze a judgment debtor’s assets and determine the best approach to seizing those assets in order to satisfy a judgment. If you need assistance in collection your judgment, please contact the attorneys at Gross & Romanick.

Monday, November 14, 2011

The Territorial Scope of Garnishment upon Multinational and International Banks

The process of garnishment is intended to reach the intangible property of the judgment debtor. Accordingly, garnishment is used to attach a judgment debtor’s bank account in order to satisfy the underlying judgment. Often, however, the judgment debtor’s bank accounts were opened or are maintained at a branch of a bank located outside the jurisdiction where the underlying judgment was rendered. For example, a judgment debtor maintains bank accounts at a bank with branches in Virginia and Maryland but originally opened its accounts at a Maryland branch of the bank. If the judgment creditor obtained a judgment in a Virginia Circuit Court, where can the judgment creditor garnish the bank account?

If one subscribes to the notion that the judgment debtor’s account is physically located in Maryland (where it was opened), then it seems obvious that a garnishment summons issued by a Virginia court cannot reach the Maryland assets of the judgment debtor. Academically, this is not a serious concern as the judgment creditor could simply docket the judgment in Maryland pursuant to full faith and credit and garnish out of a Maryland court.

This problem is not merely academic when the judgment debtor maintains its bank accounts in a foreign country. Clearly, not every judgment rendered in an American Court can be domesticated into the judicial system of a foreign country. The Edge Act, 12 U.S.C. § 604, et. seq., states that a domestically chartered bank is permitted to maintain foreign branches if the accounts of those foreign branches are maintained independently and if the profits and losses of those foreign branches are reported to the domestically chartered bank at the end of each fiscal period as a separate item. This statutory scheme ostensibly creates a situation where the foreign branches of a domestic bank constitute a legally separate entity that is not subject to domestic process, except that it must report its profits and losses at the end of each fiscal period to the domestic bank.

Thus, in 1950, the New York Supreme Court of New York County held that a “warrant of attachment served upon a branch bank does not reach the assets held for, or accounts maintained by, the defendant in other branches or in the home office.” Cronan v. Schilling, 100 N.Y.S.2d 474 (Sup. Ct. N.Y.Co. 1950). This ruling has been upheld as recently as 2003 with regard to foreign held accounts:

the affected accounts are believed to be held in the banks’ foreign branches. This implicates the doctrine of New York law knows as the ‘separate entity rule,’ which in its pristine form provides that ‘each branch of a bank is treated as a separate entity … in no way concerned with accounts maintained by depositors in other branches or at a home office.

Motorola Credit Corporation v. Uzan, 288 F.Supp.2d 558 (S.D.N.Y. 2003). Given the staggering volume of international business and banking transactions that go through New York City, these two opinions carry enormous weight in the banking industry.

There is little guidance from appellate courts on this issue as it arises only in very narrow circumstances. The United States Supreme Court has held that if the bank has control over the foreign assets, then the assets held in the foreign branch are subject to execution. See, United States v. First National City Bank, 379 U.S. 378 (1965). The Second Circuit Court of Appeals has held that if a bank maintains unincorporated foreign branches operating under the same name as the domestic bank, then the foreign accounts are subject to garnishment. First National Bank of Boston v. Banco Nacional de Cuba, 658 F.2d 895 (2nd Cir. 1981). Consequently, the question is: Can a U.S. court compel a domestically chartered bank to disgorge accounts maintained in a foreign subsidiary even if such disclosure would cause the bank to violate foreign law?

The Board of Governors of the Federal Reserve System has issued a published interpretation stating that “[a] foreign branch established by a national bank is not an independent corporation and the creditors of the branch are general creditors of the parent bank.” Published Interpretations of the Board of Governors of the Federal Reserve System § 5600 (1980). The Second Circuit has also adamantly suggested that “[i]f the Bank cannot, as it were, serve two masters and comply with the lawful requirements of both the United States and of [the foreign government], perhaps it should surrender to one sovereign or the other the privileges received therefrom.” First National City Bank of New York v. I.R.S., 271 F.2d 616 (2nd Cir. 1959). The Second Circuit has also ruled that a Court can compel a Garnishee to turnover stock held by the Defendant in a foreign country so long as the court has personal jurisdiction over the Defendant. Koehler v. Bank of Bermuda, Ltd., 577 F.3d 497 (2nd Cir. 2009).

Motorola Credit Corp. v. Uzan, specifically affirmed the doctrine despite noting that the incongruity of allowing banks to “trumpet their account-holders’ ability to access their funds instantaneously anywhere in the world” yet continue to rely upon the separate entity rule. As communications advance, it seems anachronistic for courts to continue to hold that a domestic bank cannot readily determine assets held on the other side of the world.

Multi-national banks may, for a variety of reasons, continue to assert the validity of the “separate entity doctrine” in order to prevent judgment creditors from recovering the monies to which they are entitled. Future articles will discuss the relationship between banks and their customers in the collection process.

If you have a judgment to collect, contact Gross & Romanick.

Tuesday, November 8, 2011

The Role of Federal Courts in the Judgment Collection Process

Judgment Collection is a creature of state law. Rule 69(a) of the Federal Rules of Civil Procedure very clearly articulates the procedures that will apply if a judgment is collected in federal court: “The procedure on execution — and in proceedings supplementary to and in aid of judgment or execution — must accord with the procedure of the state where the court is located …” It is important to note that the language of Rule 69(a) goes beyond the traditional outlines of the Erie doctrine. Rule 69(a) does more than graft state substantive law onto federal procedure; Rule 69(a) authorizes the federal courts to utilize state procedural tools to aid in the execution of judgments. This means that the federal courts are not limited to Writs of Execution as defined in Rule 69(a), but are also able to provide the full panoply of post-judgment collection proceedings, including garnishments. See, e.g., Grenada Bank v. Willey, 694 F.2d 85 (5th Cir. 1982); Skevofilax v. Quigley, 810 F.2d 378 (3rd Cir. 1987).

Although Rule 69(a) may provide the federal courts with power that is coterminous with coordinate state courts to enforce judgments, it begs the question as to why a judgment creditor would want to enforce a judgment in the federal courts. After all, it seems fairly self-evident that state courts would be better arbiters of state procedure than the federal courts. An initial analysis may conclude that the geographic scope of the federal courts would be beneficial to a judgment creditor. A federal court can, at least in theory, enter an order that has nationwide effect; conversely, a state court is geographically limited. This analysis, however facially appealing, is faulty. A federal court engaged in execution proceedings may actually be more geographically limited than a state court. A recent opinion from the Western District of Virginia held that a garnishment sued out of a federal court is only enforceable against wages earned within the territorial limits of Virginia. Memorial Hospital of Martinsville v. D’Oro, Docket No. 4:10MC00001 (July 8, 2011). The opinion further notes that the Writ of Execution is limited to property located within the territorial confines of the Western District of Virginia. Id.
If the availability of procedural tools for collection of judgments and the geographic limitations of state and federal courts are, at least, co-extensive, what then would be a compelling reason to attempt to enforce a judgment in federal court? In our practice at Gross & Romanick, P.C. in Fairfax, VA, we have identified two types of cases where it is advantageous to attempt execution in the federal courts.

The first is where the judgment debtor lives out of state and the creditor has little information regarding the assets of the judgment debtor. In a Virginia state court, the judgment creditor has the ability to issue a summons to the judgment debtor to answer interrogatories regarding the judgment debtor’s assets. Va. Code § 8.01-506. However, if the debtor resides outside of the Commonwealth, it is usually impossible to compel the debtor to return to the Commonwealth to answer interrogatories. However, Rule 69(b) of the Federal Rules of Civil Procedure allows a judgment creditor to simply conduct discovery in accordance with the Federal Rules. Thus, depositions in aid of execution can simply be noticed, subpoenas can have nationwide effect and the judgment creditor can issue interrogatories in aid of execution on a judgment.

The second class of cases where federal execution is useful is when the federal court holds some property of the judgment debtor. Principals of federalism prevent state courts from issuing orders directing the federal courts how to dispose of property; thus, state court enforcement in these circumstances is impossible. Typically, these cases occur when the judgment debtor has obtained a judgment against a third party or when the judgment debtor has posted some kind of bond with the federal court. In these circumstances, enforcement in the federal courts is required.

While there are many reasons to use the federal courts to enforce a judgment, there also good reasons to avoid federal courts. Future articles will discuss the pros and cons of utilizing federal courts.

If you have a judgment to enforce, please contact us a Gross & Romanick.

Thursday, January 13, 2011

Introduction to Judgment Collection Methods

You won your court case and the judge signed an Order stating that the defendant owes you quite a bit of money. The appeals court has dismissed the defendant’s appeal and the whole ordeal with the defendant should be shrinking into little more than a bad memory. Break out that expensive champagne and celebrate victory, because the defendant, now known as the “judgment debtor”, is picking up the tab for the festivities. NOT SO FAST!!!

Since the abolition of debtor’s prison in 1833, most court orders commanding the payment of money, also known as “money judgments”, are not enforced through the coercive power of the court’s contempt authority. Rather, money judgments are enforced by the plaintiff, now called the “judgment creditor”. The judgment creditor may utilize court processes to collect the judgment, but the court will not on its own initiative collect a judgment for the judgment creditor.

Complicating the situation is that there is no federal law governing the collection of judgments, nor is there a unified database of judgments and collection information. It is therefore no surprise that a May, 2001 article by Arlene Hirsch of the Wall Street Journal’s Startup Journal reported that approximately 80% of money judgments in the United States go uncollected. Collection law constitutes a vast field of legal doctrines arranged in an amalgamation of (sometimes conflicting) state law about which most lawyers know very little. Making matters worse is that most collection proceedings are considered to be in “derogation of the common law”, meaning that the procedural requirements must be strictly adhered to or the proceeding is deemed to be a legal nullity. This concept, in and of itself, is an interesting proposition as the common law method of collecting a debt was to have the judgment debtor sent off to debtor’s prison.

By way of introduction to the topic of legal collections, there are typically four (4) major categories of collection procedures to obtain satisfaction of a judgment: garnishment, debtor interrogatories, actual levy and liens. The purpose of this post is to provide a very general overview of each method. Of course, each method has its own unique benefits and risks, so this post is not meant to constitute legal advice. If you have questions regarding your rights, you should contact an experienced collection attorney.

The lien is probably the easiest collection method to understand, but it is often the least effective and slowest to recover money. Nearly every jurisdiction in the United States has a statute that either by operation of law or through some relatively simple procedures transforms a money judgment into a lien against the real or personal property of the judgment debtor. A creditor can utilize these statutes to collect a judgment from real estate by the following: find real property of the judgment debtor, docket the judgment in the jurisdiction where the property is located and wait until the debtor attempts to sell or refinance the property. Most states require judgment liens to be satisfied out of the proceeds of a sale of real property and the judgment debtor is generally not able to refinance without paying off judgment liens. On the other hand the judgment creditor can be more aggressive and execute on the judgment by selling the real property, but each jurisdiction has procedures that govern how to execute on the judgment against real estate. Liens on personal property work in much the same way, but are not usually as effective as liens on real estate because of the easy transferability of personal property.

The actual levy, in contrast to the lien, is probably the most difficult collection method to successfully pursue. That said, it is sometimes the best (and only) way to recover money. The actual levy is the means used by a judgment creditor to seize the tangible assets of the judgment debtor, including cash. In most states the actual levy is performed by the sheriff, marshal or court security officer at the request of the judgment creditor; the seizure involves the sheriff taking items of personal property belonging to the judgment debtor and selling them in a commercially reasonable manner. Many judgment creditors, after years of squabbling and litigating against a judgment debtor take particular satisfaction in having the sheriff take the judgment debtor’s car, farm equipment or jewelry. In some circumstances, this is a very effective method of satisfying a judgment, particularly if the judgment debtor owns valuable jewelry orshares of stock. Many states, however, require the judgment creditor to post a bond with the sheriff before the sheriff will engage in a levy. The items seized at levy may also be insufficient to satisfy the judgment after sale. Moreover, the procedural requirements for a seizure can be considerable. In many cases, the judgment debtor retains a bit of a trump card over the actual levy through the use of statutory exemptions or bankruptcy. However, if the judgment debtor’s only assets are stock or other tangible personal property or if the judgment debtor maintains a considerable inventory, the actual levy may be the best way to go. Seizure of the cash from a retail establishment, known as a “till tap”, can realize results, and make a statement to the judgment debtor.

Similar to the actual levy, but designed to reach intangible personal property is the garnishment action. Different states have different names for this procedure, but every state has a similar procedure that allows the judgment creditor to intercept assets payable to the judgment debtor by third parties. Customarily this is utilized to seize bank accounts or to intercept wages, but can also be used to intercept rental receipts, contract payments, proceeds from the sale of a business and any other item of intangible personal property. This collection method, like the actual levy, is subject to various statutory exemptions. However, in most states, the garnishment procedure is far more straightforward than the procedure for an actual levy. Moreover, a bond is usually unnecessary.

Debtor Interrogatories are used to determine the location of the assets of the judgment debtor. Some states have statutes authorizing the use of independent debtor interrogatory proceedings where the judgment debtor is put under oath by a judge and required to answer questions about the debtor’s assets, income, expenses and financial situation. If those questions reveal assets, then, in some circumstances, the judge is empowered to order turnover of those assets to the judgment creditor under the pains and penalties of contempt. Other states simply allow the judgment creditor to conduct a deposition of the judgment debtor, but the judgment debtor must determine how to seize such assets. The power of the debtor interrogatories depends in large part upon what is authorized by state statute. In addition to questioning the judgment debtor, the judgment creditor can require the judgment debtor provide financial records, such as bank account and brokerage statements.

Monday, January 10, 2011

Pre-Judgment Attachment: Get It Before It Vanishes

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Related Articles: Business Law/Commercial Landlord/Litigation

Pre-Judgment Attachment: Get It Before It Vanishes

Unfortunately, filing a lawsuit to collect a debt is often an encouragement to the debtor to move and conceal assets. This sometimes makes creditors hesitant to take early legal action. But, Virginia law has a solution: the pre-judgment attachment. Virginia law allows a creditor to bring the debtor's property into court custody at the outset of a lawsuit, thereby assuring that the property will be available to satisfy any judgment the court eventually grants.

Virtually any significant asset of a debtor can be subjected to attachment. Although real estate and business equipment are the most popular targets, a creditor can also attach bank accounts or even other monies owed to the debtor by a third party. One useful application of pre-judgment attachment occurs in construction cases, when a sub-contractor attaches payments to an out-of-state general contractor. An interesting case is the attachment of an elephant from a traveling circus; unfortunately, the creditor neglected to compute the cost of feeding the animal before taking this ill-advised action.

To secure a pre-judgment attachment the plaintiff files a sworn petition setting forth the cause of action and the grounds for the attachment. The justifications for attachment must fall within one or more of the categories allowed by Virginia Code Section 8.01-534. If the petition is approved by a judge, the creditor must post a bond of twice the amount of the claim. Upon posting of the bond a warrant will be issued ordering the sheriff to seize the property and bring it into the custody of the court. Generally, the debtor will request a hearing within twenty-one (21) days of the seizure at which time the court will determine whether the property will be released or remain in custody until the lawsuit is completed. Many attachments are dismissed at that hearing because of failure to comply with the technical requirements of Virginia attachment procedure.

Pre-judgment attachments do involve certain risks to the creditor. The bond is posted in order to compensate debtors for the improper seizure of their assets. Therefore, creditors should not use attachments for questionable claims. Nevertheless, the judicious utilization of this legal tool can be the difference between an empty judgment and a collected judgment.

Grounds for Attachment:
In summary form, it is sufficient grounds for attachment that the defendant:

  1. Is a nonresident corporation or individual, which has assets or debts owed to it in Virginia

  2. Is removing or about to remove out of the Commonwealth with intent to change domicile

  3. Intends to remove, or is removing, or has removed the specific property sued for or his assets or the proceeds of the sale of his property out of the Commonwealth so that the debtor will not have therein assets sufficient to satisfy the judgment

  4. Is converting, is about to convert or has converted his property into money, securities or debt with the intent to hinder, delay or defraud creditors

  5. Has assigned or disposed of or is about to assign or dispose of his assets with intent to hinder, delay or defraud creditors

  6. Has absconded or is about to abscond from the Commonwealth or has concealed himself to the injury of his creditors, or is a fugitive from justice.

The Collection Plan: Taking Control of Your Accounts Receivable

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Related Articles: Business Law/Commercial Landlord

The Collection Plan: Taking Control of Your Accounts Receivable

You've completed your service for the client and sent out the bill. But the money is not yet in your hands. You could just sit and wait (and hope), but we suggest a better alternative: a collection plan. A comprehensive plan will make collections more successful by informing clients of their obligations and identifying bad debts early enough to take appropriate action.

Formulating an effective collection plan is the first and most important step in getting control of your accounts. By setting up a comprehensive scheme for dealing with accounts receivable collections, you can obtain your money faster and avoid the necessity of going to an outside collection agency or attorney.

In constructing a collection plan it is important to strike a balance between effective collections and not angering (and losing) clients. At the same time it is necessary to quickly identify those clients who will not pay, so that more drastic actions are initiated.

In order for a collection plan to be effective it must treat all accounts according to the same policy so that your staff and clients know their obligations. This consistency will can be best achieved through the creation of a "schedule", similar to the one show below, which sets out the various contacts that should be made with the debtor at appropriate intervals. When designing a schedule you need to keep diplomacy in mind as well as your financial needs. A bookkeeper can call a client to check on an account a certain amount of time after a bill has been sent. If this is done incorrectly it can be very rude and will be likely to antagonize your clients, but if it is done properly it can be both polite and effective.

The schedule show below is only an example; you will have to design your own plan to suit your particular business needs.

At some point it will become apparent that any further efforts to convince a client to disgorge the unpaid funds would be futile. The whole point of a collection plan is to determine who is not going to pay, and to determine it as quickly as possible. Our own feeling is that any account which is over 90 days past due should be considered a bad debt and sent to an attorney for collection.

Accounts Receivable: A Plan to Improve Your Collections

Effective management of accounts receivable requires a written procedures manual, so that the patients, the office staff and the doctors understand everyone's duties and responsibilities. This plan will increase in-house collections.

A comprehensive collection plan that informs your patients of their obligations and identifies bad debts early can go a long way toward putting you in control of your accounts-getting your money more quickly and minimizing the cases sent to an attorney or collection agency. Any such plan that you devise must strike a balance between a policy that is too harsh at the cost of strained relations, or a lost patient, and one that is too permissive at the cost of profitability. Even the best plan will prove futile in some cases, when it becomes apparent that any further effort to convince a patient to pay will fall on deaf ears. Identifying bad debts and quickly sending them out for collection will improve your success rate.

This sample outlines a mix of written and oral reminders. Perhaps one like it will work for you.

Past Due Contact Type
15 days Pleasant memo: "Do you need more information?" -- written
30 days Polite inquiry: "Just a reminder." -- oral
45 days Strong reminder: "Is there a problem?" -- written/oral
60 days Strong demand: "Please pay now!" -- written/oral
75 days Final demand: "Pay now or face legal action." -- written/oral/personal visit
90 days Place debt with collection agency or attorney