Loan Collections

Types of loan collections

A wide variety of loans typically fall within the categories of commercial or consumer transactions. It is important to distinguish between consumer debts and commercial debts. A consumer debt is a debt incurred by an individual, primarily for a personal, family or household purpose. A commercial debt arises from an obligation to pay for goods or services used in the course of business. These different types of debt may help a creditor in determining which federal and state laws apply to the collection of the debt. Additionally, some loans are a onetime occurrence for goods or services. Other transactions create an ongoing credit relationship between the parties. Examples of loan collection matters we handle include:

• Mortgage loans
• Automobile, boat or other types of vehicle loans
• Student loans
• Credit agreements
• Revolving lines of credit
• Credit card debt

An experienced debt collections attorney in NJ can review the documentation supporting the loan and determine the best strategy for pursuing collection efforts. Thus, it is important to keep copies of any paperwork supporting your loan transaction, including credit agreements, past payment records and correspondence with the debtor.

The steps our loan collection attorney takes to collect a loan

A collection agency can only harass a borrower into paying you. A debt attorney can make demands for payment and follow up on those demands with a lawsuit. Many times, a formal demand letter from a lawyer is sufficient to motivate the borrower to pay you. If not, getting served with a lawsuit seeking the original amount due, plus attorney’s fees and courts costs, may do the trick. Once a lender has obtained a judgment, we take aggressive enforcement actions, such as garnishments, liens and asset seizures; to recover the compensation you deserve.

Step 1: Obtaining a judgment against a debtor

If a borrower has defaulted on their loan, the first thing a debt collection attorney can do that a collections agency can’t is sue the company or individual in order to obtain a judgment against them. This is the first step in the process. Your attorney will present the court with the original loan agreement, its terms, and show that the borrower has failed to uphold their end of the agreement.

If a borrower has defaulted on their loan, the first thing a debt collection attorney can do that a collections agency can’t is sue the company or individual in order to obtain a judgment against them. This is the first step in the process. Your attorney will present the court with the original loan agreement, its terms, and show that the borrower has failed to uphold their end of the agreement.

In many cases, the debtor never bothers to show up. In other cases, they attempt to defend themselves. They can either claim that they do not owe the money, they have paid the money, or that the lender has not followed the proper procedure (under the contract) in the attempt to secure the judgment. Once we receive a judgment in your favor, we can begin leveraging the debtor to pay the debt using more aggressive means.

Step 2: Enforcing the judgment against the debtor

Once we have obtained a judgment against the debtor, we can begin using more aggressive means of enforcing the judgment. This includes placing liens on their real estate, levying their bank account, garnishing their wages, or obtaining writs of execution to conduct seizures of their property.

Under the law, it doesn’t matter if the debtor is an individual or a business. But executing the judgment against a business has several advantages. An individual who files for bankruptcy under Chapter 7 can discharge most of their debts without repaying them. In many cases, creditors fail to recover anything from the liquidation. A business that files for Chapter 7, on the other hand, is dissolved in the process of filing. That means any assets that the business owns can be liquidated and distributed among creditors. For that reason, most businesses will not want to file for Chapter 7.

Another reason why they don’t want to file for Chapter 7 is that the debt will survive the process of liquidating and dissolving the business. In this case, you will be able to pursue the debt against individual owners if the liquidation does not cover the entire debt.

Snellings Law, LLC can handle creditor actions against both businesses and individuals. Our attorneys will professionally (but aggressively) pursue the recovery of your loan.

Recovering debts from individuals

Loan Collection Attorney in Parsippany, New JerseyIf your debtor is an individual, once Snellings Law, LLC obtains a judgment against them, there are a number of tactics that we can employ. These include putting liens on their real estate, garnishing their wages, or levying their bank account. We can even put liens on their home. While we can’t force the sale of the property to recover the debt, we can make it more difficult to sell and reap the benefits of any sale. If the debtor files for bankruptcy, we can, in some cases, get the automatic stay lifted and allow you to continue to pursue your debt.

Recovering debts from businesses

You have more options recovering a debt from a business than you do with an individual. The business is less likely to file for Chapter 7 because the business will be dissolved entirely in the process.

One of the most powerful options at your disposal is the judgment lien. A judgment lien allows you to attach a lien to any real estate owned by the business. In essence, the judgment lien allows you to turn an unsecured debt into a secured debt. Since businesses do not qualify for a homestead exemption, this is a very powerful tool to have at your disposal.

Another option is a bank levy. A bank levy allows you to freeze the debtor bank account in the amount of the delinquent balance then obtain permission from the court to transfer that amount to you.

Additionally, you can obtain a writ of execution against the debtor-business if they choose to ignore the order from the court to repay the debt. The writ of execution will allow you to seize property owned by the business in order to recover the debt.

Fraud and breach of contract

Snellings Law, LLC can also manage other matters of business litigation including fraud and breach of contract.

If one party fails to uphold their end of a contract, they can be sued under contract law. This can include either refusing to perform a task they agreed to perform or making it impossible for you to perform some task that you are obligated to perform.

Our attorneys can either force the party to fulfill their obligations or recover damages you have suffered because they failed to fulfill their obligations.

Under the New Jersey Consumer Fraud Act, a party that knowingly misrepresents or omits information that is crucial to the terms of an agreement or implied agreement commits fraud against a partner, client, or customer. The attorneys at Snellings Law, LLC can help you or your company sue for damages related to the fraud or file a complaint under the Consumer Fraud Act.

Schedule your confidential consultation with a Parsippany, NJ loan collection attorney

Whatever type of delinquent loan you have in New Jersey, we can help recover payments owed to you. Contact Snellings Law, LLC today to schedule your appointment. We have available parking at our office and offer easy access to public transportation. We provide evening and weekend appointments if needed.