Creditors' Rights/Collections

Often times businesses find themselves dealing with other companies or individuals who fail or refuse to pay just debts, leaving the business with mounting and ever-aging accounts receivable. Under both federal and state law, there are a variety of statutory and common law remedies available to a business caught in this position to help enforce its rights as a creditor and collect just debts owed to it.

There is the ability to sue for breach of contract, sworn account, and unjust enrichment/quantum meruit (equitable relief). Beyond that, in certain circumstances even prior to a judgment being obtained, statutory provisions provide for the appointment of a receiver for a debtor, pre-judgment turnover orders, sequestration, and injunctive relief to prevent a debtor from disposing of assets that could be used to satisfy any judgment obtained. Additionally, federal law permits creditors to force debtors into involuntary bankruptcies if, in most cases, three or more creditors can show that the debtor is not generally paying its debts as they come due.

Once a judgment is obtained against the debtor, additional rights vest with a creditor to satisfy the debt owed. At that stage, the creditor has the ability to (i) record an abstract of judgment, which perfects a judgment lien against the debtor's non-exempt real property in the counties where it is recorded, (ii) have a writ of execution issued and levied to perfect a judgment lien against the debtor's personal property, (iii) pursue post-judgment discovery to determine the full nature of assets of the debtor to satisfy the debt owed, (iv) obtain a post-judgment turnover order (with the appointment of a receiver) to seize non-exempt assets of the debtor and sell them to satisfy the debt, (v) garnish accounts holding money of the debtor, and (vi) obtain a writ of sequestration to sequester assets.

Representing creditors in the collection of debts is a considerable part of Snow & Green LLP's practice. The Firm has pursued collection matters and obtained liens and ownership of equipment to satisfy debts. Additionally, the Firm often represents bankruptcy plan trustees in collection suits.