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Presented by Michael
H. Raichelson of
RaichelsonLaw at 21900
Burbank Blvd. , Sui te
300, Woodland Hi l ls, CA
91367
(818) 444-7770
www.enforcedebts.com
PERFECTING JUDGMENTS &
SEIZING ASSETS
• Former General Counsel of col lection l i t igation f i rm focused on purchasing large portfol ios of consumer accounts and third party col lections.
• Principal of the Law Offices of Michael H. Raichelson, a f i rm focused primari ly on complex commercial and col lection l i t igation and representing creditors and debtors in Chapter 7, Chapter 11, and Chapter 13 proceedings.
• Go to tr ial lawyer and advocate with substantial experience in complex commercial and col lection l i t igation, representing cl ients throughout the United States in state and federal courts.
• Cert i f ied Bankruptcy Law Special ist, The State Bar of Cal i fornia - Board of Legal Special ization.
• Rated AV Preeminent® by the Martindale -Hubbell® Peer Review Ratings™.
• Selected as a Southern Cal i fornia Super Lawyer® from 2011 through 2017.
MICHAEL H. RAICHELSON, ESQ.
Is the debt collectible?
I am ready to file suit, now what?
Can I get a default judgment, and if so, what kind?
What are FDCPA claims and how to avoid them?
What post judgment enforcement mechanisms are available to collect
on the judgment?
The debtor has filed bankruptcy, is it now over?
KEY TOPICS TO BE DISCUSSED
Is this a consumer debt or a business debt?
If a consumer debt, do you have access to a credit report?
Is the debtor current on his other obligations and is there available credit?
If a business debt, what type of business and is there a personal guarantee?
Skip tracing tools:
TLO
Social media
Does your client have previously negotiated checks from the debtor?
IS THE DEBT COLLECTIBLE?
Demand Letter - Commercial
If the debt is a business debt, weigh
the considerations for alerting the
debtor as to collection efforts versus
filing suit and obtaining pre judgment
writ of attachment.
Pre judgment writ of attachment
In most states, if the debt is a
business debt, Courts allow for ex
parte applications for pre judgment
writs of attachment.
Demand Letter - Consumer
If the debt is a consumer debt, send
out a demand letter, including a debt
validation statement.
A debt validation statement may
assist you in proving a common
count for account stated in the event
of a default prove up hearing.
Provide a 30 day window to respond.
If the response disputes the debt, do
a diligent investigation as to the
dispute.
THE DEBT IS COLLECTIBLE, NOW WHAT?
“You may dispute the validity of this debt, or any portion thereof, by
contacting our office at the address shown above within thirty (30) days
after receiving this notice. In that event, we will obtain and mail to you
written verification of the debt. Otherwise, we will assume that the debt is
valid.”
“This communication is an attempt to collect a debt and any information
obtained will be used for that purpose. However, if you have received a
discharge of the debt referenced herein in a bankruptcy proceeding, this is
not an attempt to impose personal liability upon you for payment of that
debt. In the event you have received a bankruptcy discharge, any action to
enforce the debt will be taken against the property only.”
DEBT VALIDATION NOTICE AND MINI MIRANDA
LANGUAGE FOR SECURED DEBT (SAMPLE)
Make sure that you have all media necessary to obtain default judgment and comply with state laws.
Charge off statement
Last pay date statement
Signed agreement
Personal guarantee
Choose correct court and venue
Draft complaint with correct causes of action
Attempt service and follow up with due diligence
I AM READY TO FILE, NOW WHAT?
Confirm that you are suing on behalf of your client
Confirm proper name for the defendant
Include, among other things, causes of action for open book account,
account stated and breach of contract for a typical consumer debt.
Identify correct courthouse for the suit and state law requirements for
time for service.
Identify any requirements within state for suing upon the particular
debt.
THE COMPLAINT AND CAUSES OF ACTION
If the Defendant appears, is he/she represented by counsel or acting as his/her own defense counsel? If the Defendant is represented by counsel, what is defense counsel’s representation?
Is defense counsel likely to position the case to assert offensive claims for violations of FDCPA?
If the Defendant appears pro se, can you speak with the Defendant directly to negotiate a settlement. If a consumer debt, use Mini Miranda – advise Defendant that you are attempting to
collect a debt and anything used in the conversation may be used for that purpose.
Assume Defendant is recording the conversation and avoid foil language and/or raising your voice.
If the Defendant fails to answer and/or otherwise respond to
the lawsuit, take the Defendant’s default and obtain a
default judgment.
DEFENDANT’S APPEARANCE VERSUS DEFAULT
Make life easy for the Court and the Default Clerk. Include copies of all relevant documents, including the proof of service or other relevant court orders.
If the issues are unique, include a short brief of points and authorities
Dismiss all Doe Defendants.
With a promissory note, include a statement concerning using copies in lieu of an original with a proposed order if required by your Court.
Include a clear affidavit/declaration identifying how you calculated damages, interest, attorney’s fees and costs.
Focus on the cause of action or causes of action you are trying to prove and ignore the remaining causes of action.
Can you do a clerk default or is a court default required. May depend on whether the Defendant was personally served, served via substituted service, served
by publication and/or state laws prohibiting a clerk default judgment under certain circumstances.
Court forms required, including a possible application for entry of default and default judgment.
OBTAINING THE DEFAULT AND DEFAULT
JUDGMENT
The F.D.C.P.A. is the Fair Debt Collection Practices Act, which is a federal laws protecting consumers from harassing and unfair debt collection practices.
The F.D.C.P.A. only applies to the collection of consumer debts.
The law restricts the means and methods by which collectors can contact debtors - including attorneys - as well as the time of day and number of times contact can be made.
If the debt collector violates the F.D.C.P.A., the consumer can sue the debt collector. F.D.C.P.A. lawsuits are often times filed strategically as a negotiation tool by
debtor’s counsel to reduce or eliminate recovery.
Problem - Attorney’s fees are recoverable under the F.D.C.P.A.
WHAT IS THE F.D.C.P.A. AND SHOULD I BE
CONCERNED?
Do not contact consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time.
You must not communicate with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions.
Do not cause a telephone to ring or contacting a person via telephone with an intent to annoy, abuse, or harass any person at the called number.
Do not contact a consumer at their place of employment after
being advised that this is not acceptable or prohibited
by the employer.
Do not contact a consumer who you know to be represented
by counsel.
GENERAL PROVISIONS OF THE F.D.C.P.A.
Do not misrepresent the debt or use deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer.
Do not communicate with the consumer and/or the pursue collection efforts after receipt of a consumer's written request for verification of a debt made within the 30-day validation period.
Do not use abusive or profane language in pursuing the debt.
Do not reveal or discuss the debt with any third parties, other than the debtor ’s spouse or attorney.
Do not contact the debtor using embarrassing media,
such as a post card.
GENERAL PROVISIONS OF THE F.D.C.P.A.
(CONTINUED)
Obtain a writ of execution for . . .
Wage garnishment and/or
Bank levy
Open a safety deposit box with a bank levy.
Abstract of judgment to create judgment lien on property within the
county.
Reporting judgment to the credit reporting agencies.
Judgment debtor examinations.
MDI Verify – for locating bank accounts.
TLO – for real property searches.
POST JUDGMENT ENFORCEMENT MECHANISMS
Just because the debtor has filed bankruptcy does not mean that it is over.
Monitor the bankruptcy through discharge to make sure that it is not dismissed and/or converted before discharge.
If it is a chapter 13 or chapter 11, you may be entitled to a portion of the debtor ’s plan payments.
Dividend based on pro rata share of same class of creditors.
Was the debt incurred within 70 to 90 days before the bankruptcy filing?
If so, there may be a presumption that it is fraudulent under Bankruptcy Code.
File an adversary complaint within 30 days after the initial Meeting of Creditors.
File a proof of claim even if you are listed on the debtor ’s bankruptcy schedules with proper supporting documentation.
If you have a judgment, attach it to the proof of claim.
If you have a promissory note, attach a copy of the note.
THE DEBTOR FILED BANKRUPTCY – NOW WHAT?
Determine collectability before filing.
Use the correct cause of action.
Follow up with a default and default judgment if no response.
Use post judgment enforcement collection methods, including wage
garnishment and bank levies.
Do not lose hope if the debtor files for bankruptcy.
If you have any questions regarding collection and/or bankruptcy,
please contact Michael H. Raichelson at 818-444-7770.
CONCLUSION
