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What's on Tap? How Creditors Can Maximize Their Bottom Line

Our popular What’s on Tap? webinar series inspires many important yet nuanced questions about the collections process. Since we only have about 30 minutes per episode to answer our audience, we wanted to share the top takeaways from our recent episode to address one of the most popular inquiries in our industry: How do creditors maximize their bottom line?

The good news is there are a number of ways to improve your collections efforts and returns. But before we dive into the details, let’s talk about another important topic: beer! 

Our panel, including shareholder and Philadelphia office managing attorney Michael Dougherty and attorneys Cameron Deane and Andrew Condiles, love to sip on a refreshing brew while discussing collections - who doesn’t? This week, they enjoyed Neshaminy Creek’s The Shape of Hops to Come. The Imperial India Pale Ale is an American West-coast style beer that evokes a juicy, citrus, and pine-like hop character. 

Now, back to collections. Here are a few key legal collections strategies and tips discussed during the episode. And don’t forget to watch the full episode along with your favorite beer or drink of choice. 



1. Collecting on unpaid debts: A legal firm is your best bet

While you may be tempted to keep the collections process in-house for more control and cost savings, this method creates several challenges. The most obvious obstacle is debtors easily ignoring your phone calls, letters, and other forms of outreach. Just think of how often you ignore unknown callers or repeat call offenders. 

You can also outsource to a collections agency, but the days of “dialing for dollars”, as we used to say, aren’t as advantageous as they used to be. Many people have figured out how to avoid or block the collections robocalls, so this isn’t always the most worthwhile path. 

Our team recommends working with an experienced law firm to file a law suit with the court system. Debtors are much likely to respond to a notice – such as a call or letter – with the legal firm’s name attached to it. 



2. The benefits of filing a law suit 

There are many positives to filing a suit with your local court, but the number one benefit is the ability to obtain a judgment. In Pennsylvania and New Jersey, a judgment holds for up to 20 years. Rather than hoping you’ll be paid by collecting yourself or hiring an agency, the judgment gives you a long-term solution for collecting on the debt. 

So, how do you file a suit and obtain a judgment? The process is fairly straightforward. If you work with a law firm, your firm will prepare a complaint that sets out what you are alleging (i.e. the debtor has missed payments or has not fulfilled the payment obligations of the loan). Once the complaint is prepared, a sheriff, constable or court officer will personally serve it upon the debtor which impresses upon them the seriousness of the matter.  You then move forward to obtaining your judgment. 

In all, the process can take roughly three to five months, which isn’t that long compared to the lengthy timeline of trying to recover debts on your own. Often, it can take many months or years until you see repayment, if you ever do. 



3. Separating the good from great legal support 


Our top recommendation for boosting the bottom line is working with an attorney to file a suit and obtain your judgment. But you don’t just want a piece of paper saying you are owed money. You need an experienced attorney who actually helps you collect on the unpaid debt through post judgment collections. 

During the post judgment collection process, some clients move ahead with a deposition, which is of very little cost. Your attorney sends the defendant a legal document with a series of questions that aim to uncover information related to their financial history, assets, other debts, etc. The primary purpose of the questions is to let the debtor know you are pursuing action. In New Jersey, not responding to the deposition questions may put you in contention with the court and a warrant may be issued for arrest. Talk about getting someone’s attention!

Another effective remedy that can be facilitated by a law office or attorney includes a bank attachment. When you have a judgment in Pennsylvania or New Jersey, you can use it to freeze the debtors bank account. This shows the debtor how serious the situation is and may cause them to pay what’s owed or work out a repayment plan with you. 

Similar to the deposition questions, a bank attachment remedy can make all the difference in your ability to collect on what’s owed to you. A great attorney works alongside you to make sure that you do. 



Watch the full episode


To learn more about collections strategies for maximizing your bottom line, you can watch the full episode What’s on Tap? today
If you have any questions or need further clarification about the content discussed throughout the episode, connect with Mike, Cameron, or Andrew at any time for the most up-to-date and accurate collections information.

This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

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