Debt Collection Tips: Executions

Posted on August 23, 2014 by Richard Klass

Once a Judgment has been obtained against a debtor, an ” Execution ” may issue to a Sheriff or Marshal. An Execution is a legal document which directs the Sheriff or Marshal to levy upon certain assets of the debtor.

There are three types of Executions:

Property Execution: issues against personal property of any nature belonging to the debtor, including bank accounts, cars, shares of stock, equipment, etc.
Real Property Execution: issues against real estate owned by the debtor, permitting the sale of the real estate at auction.
Income Execution: issues against a debtor’s wages, permitting the garnishment of the debtor’s salary or compensation.

Each county of New York State has a Sheriff, who performs the above functions. Within the City of New York, a City Marshal may be selected by the creditor in lieu of a Sheriff (except for real estate sales). Some creditors prefer using a City Marshal instead of a Sheriff because City Marshals are not City employees, but rather work strictly upon a percentage of the amount collected. The perception is that City Marshals have more incentive to work harder because of this fee structure.

According to statute, the Sheriff/Marshal is entitled to collect a levy fee and “poundage” of 5% from the debtor on top of the Judgment amount as a fee.

In some situations, the Sheriff cannot levy upon property, where there may be title issues relating to the ownership of the property, at which time further legal proceedings may be necessary.

by Richard A. Klass, Esq.

copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.com with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: Issuance of the Summons in a Collection Case

Posted on August 3, 2014 by Richard Klass

A “Summons” is a legal document which notifies a person that he is being sued by another. The requirement of issuance of a Summons is a fundamental right derived from common law. There are specific rules relating to the methods of service of the Summons. In a collection case, however, there are additional rules to consider:

Venue
The venue of a case relates to the jurisdiction in which the case is brought within the State. Generally, the proper venue of a case is one in which either party resides or where the transaction took place. The venue of a case to collect upon a consumer credit transaction — one for which the purpose of the debt was for personal use, as opposed to commercial debt; many credit card cases fall into this category — must be in one of two places, either in the county in which the debtor resides or the county in which the transaction took place. Both New York State’s Civil Practice Law and Rules (CPLR) and the federal Fair Debt Collection Practices Act (FDCPA) require this rule. If a debtor applied for credit in Kings County and subsequently moved to Queens County, the Summons may be issued for either county.
Consumer Credit Transaction
According to the CPLR, the top of the Summons must state that the Summons is being issued for a consumer credit transaction.
Spanish Summons
In New York City, the Civil Court Act requires that, in addition to the Summons being issued in English, there must be an additional Summons issued in Spanish.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: The necessity of obtaining the debtor’s identifying information

Posted on July 13, 2014 by Richard Klass

Many creditors fail to obtain information from a potential debtor which may be necessary in the collection process.

In order to maximize the successful collection of a debt, a creditor must make sure that it obtains the information which will help (a) locate the debtor and (b) locate his/her assets or sources of income. A creditor should, at a minimum, obtain the following information:

Social Security Number
Date of Birth
Full name, exactly, with middle name.
Exact address, with zip code.
Employer’s name, address, telephone number, supervisor’s name and direct extension.
Verification of employment signed by employer’s human resources department.
Bank account information, with branch and account number for each account.
Spouse’s name, if applicable.
Telephone numbers for work and home.
Signed authorization from the debtor to obtain credit reports, if applicable.
If debtor is to guarantee another’s account, all information concerning the primary obligor.
Most recent federal and state tax returns, together with W-2, K-1 or 1099 forms.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: identify the proper party.

Posted on June 23, 2014 by Richard Klass

One of the most important steps in the debt collection process is determining the proper party to sue.

In the case of an individual, the creditor must take great strides to ensure that the individual debtor’s name is properly spelled, along with the debtor’s street address and social security number.

In the case of a corporation, partnership or limited liability company, the exact legal name should be obtained. The legal status of a debtor may be confirmed through the Secretary of State’s office. The creditor may also want to run a business credit report, such as a Dun and Bradstreet or Equifax report.

Where a creditor has obtained a personal guarantee of a corporate debt from an individual, it is equally critical that all the same information is obtained for that person.

The identity of a potential debtor should be verified immediately upon consideration of extending credit. Many businesses’ credit departments are lax in having account applications signed and reviewed. This first encounter with a debtor is the right time to verify the debtor’s status.

Gathering as much information as possible about a debtor will assist in collecting debt from the debtor. At every stage, from pre-suit negotiation to institution of litigation to enforcement of judgment, the exact legal name of the debtor will prove valuable to collection. Liens, credit bureau reports, and attachments of property will prove successful if accurate information is provided.

R. A. Klass
Your Court Street Lawyer

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Debt Collection Tips: Suing the proper corporate entity

Posted on June 3, 2014 by Richard Klass

Many times, a debtor will be identified as the “XYZ Company.” Without further information, the creditor cannot know whether the entity which owes the debt is a corporation, sole proprietorship, partnership, or limited liability company.

It is necessary when considering suing a debtor that the proper legal entity be identified. In the case of a corporation, the name must include either “Inc.,” “Corp.,” or “Ltd.” A limited liability company must include “LLC.” A partnership or sole proprietorship can be identified from a business certificate filed in the County Clerk’s Office. Other forms of legal entities include limited partnerships, professional corporations, and professional limited liability companies.

The necessity of suing the proper party is to ensure that when it comes time to enforce the prospective Judgment, the debtor will be properly identified and the debtor’s assets will be leviable. Further, it will help eliminate defenses concerning the jurisdiction of the court over the proper party.

To assist in collection against the proper entity, the creditor should obtain the exact name of the debtor and its type of organization at the onset of the transaction. A search through the records of the Secretary of State’s Office can verify the information provided by the debtor. The creditor may also request that the debtor provide a copy of the Certificate of Incorporation or Business Certificate of the entity. In fact, this is a common requirement of a bank when a debtor opens a bank account.

R. A. Klass
Your Court Street Lawyer

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