CREDITOR’S RIGHTS AND DEBT COLLECTION

All parties to a written contract are expected to comply with the provisions of that contract.  When a commercial debt goes unpaid, the delay in receipt of payment can wreak financial havoc on the creditor.   When your business suffers financial harm because another company fails to live up to the terms of your contract or written agreement, you are entitled to exercise your legal rights as a creditor.  

The debt collection attorneys of Bellatrix PC take an ethical but aggressive approach to recovering commercial debts on behalf of corporations, partnerships, and limited liability companies.  We have extensive experience handling debt-related legal matters including but not limited to Chapter 11 bankruptcy, writs of attachment, writs of execution, foreclosure, garnishment, commercial liens, detinue, and replevin.  We focus on recovering commercial debts as rapidly and efficiently as possible, so that your business can keep moving forward with minimal disturbance.

To arrange for a private legal consultation with our experienced business attorneys, call the law offices of Bellatrix PC at (800) 889-8376.  The sooner you reach out to us for assistance, the sooner we can start exploring the possible routes toward resolution of your debt-related legal issue.

Does the FDCPA Apply to Business Debts?

Congress enacted the Fair Debt Collection Practices Act (FDCPA) in 1977 to better protect consumers against abusive debt collection practices.  The FDCPA prohibits, among many other tactics, calling debtors at certain times of day, using certain language, and communicating with third parties.  The FDCPA is further bolstered by similar laws on the state level, such as California’s Rosenthal Fair Debt Collection Practices Act (the “Rosenthal Act”), Cal. Civ. Code §§ 1788 et seq.

The FDCPA applies exclusively to the collection of consumer debts, and does not regulate business debt collection agencies or their representatives.  15 U.S. Code § 1692a provides the following definition of a consumer debt:

“The term ‘debt’ means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.”

Only debts which meet this criteria are subject to the collection regulations mandated by the FDCPA. That being said, commercial creditors must nonetheless take precautions to avoid engaging in abusive business debt collection practices.  For instance, members of the Commercial Collection Agency Association (CCAA) must comply with CCAA ethical criteria, or risk losing their CCAA certification.  

Our attorneys will help your company evaluate its legal options to determine the most appropriate and cost-efficient means of debt recovery available to you.

money collections and debt collection

 

Domesticating and Enforcing Foreign Judgments

If a judgment has been entered in a state other than California, it is considered a foreign judgment and must be domesticated in the state of California before it can be lawfully enforced and collected by the creditor.  Depending on the specific origin and nature of the debt, the creditor may be required to:

  • Domesticate a sister state judgment.
    • Cal. Civ. Code § 1710.10(c) defines a sister state judgment as “part of any judgment, decree, or order of a court of a state of the United States, other than California, which requires the payment of money, but does not include a support order as defined in Section 155 of the Family Code.”
  • Register a federal judgment.
  • Domesticate a foreign judgment.
  • Confirm a foreign arbitration award.

In accordance with Cal. Civ. Code § 1710.15, judgment creditors are required to apply under oath for the entry of a sister state judgment.  The application must be filed in a superior court, and must include, among other components:

  • A statement confirming that the judgment is not based on a statute of limitation which has already expired.
  • A statement confirming that no court has ordered a stay on the judgment which would interfere with enforcement and collection.
  • A statement confirming that no pending actions are ongoing in any other courts.

Once the judgment is properly registered and domesticated, it becomes a California judgment.  The judgment becomes enforceable once it is served on the commercial debtor, and the creditor may obtain a writ of execution within 30 days.  The debtor has 30 days to file a motion to vacate the judgment.  Due to the short deadlines which are involved in these types of cases, it is essential for creditors to be proactive and seek legal assistance as soon as possible.  

You’ve already rendered a product or service – now you deserve to be paid for your time and effort.  If your business has suffered financial losses because of another company’s failure to pay the debts which you are rightfully owed, our creditors’ rights attorneys are prepared to take aggressive collection and enforcement actions on your behalf to protect your financial interests.   

If litigation is not desired, we are also qualified to assist your business with alternative dispute resolution in a mediation capacity.  In some cases, mediation proves sufficient to effectively resolve the collection matter.  To start discussing your business debt issue in a confidential consultation, call the experienced legal team at Bellatrix PC at (800) 889-8376 today.