If you run a business in Appleton, Neenah, Oshkosh, or Green Bay, you have inevitably had to deal with clients, customers, or vendors who owe you money. Everyone wants to get paid on time. But when there is a delinquent account, many business owners are reluctant to press the issue.
Commercial collections are an unpleasant reality of doing business in Wisconsin. You understandably do not want to call a lawyer and threaten a lawsuit just because someone is occasionally a week or two late in making a payment. But when you have provided a product or service in good faith, you have a legal, ethical, and moral right to receive the agreed upon compensation. A talented attorney can assist you with resolving a fraudulent account, in most cases without the need for litigation.
A creditor always has the right to seek payment for a lawful debt. Most of the time, a simple phone call or email will clear up a delinquent account. After all, we all forget to pay an invoice or bill from time to time.
But once you realize that a customer or vendor is unable–or unwilling–to pay what they owe you, it is time to consider stronger measures. Contacting a qualified Appleton commercial collections attorney is not necessarily the first step towards filing a lawsuit. It may simply be a step towards seeking a resolution that satisfies both you and your debtor.
Indeed, with commercial debts, the best solution is often to negotiate a modification to the previously agreed payment terms. For example, you may be willing to extend credit or allow for payment on an installment plan. If such an agreement is possible, you should always get it in writing. A commercial collections attorney can draft the necessary paperwork, including a formal settlement agreement, promissory note, security agreement, or collateral pledge agreement.
Where a negotiated settlement is not possible–or a debtor defaults on a prior agreement–then you need to consider going to court. It is important to be aware of the applicable deadlines for asserting your legal rights as a creditor. All civil actions in Wisconsin are subject to a strict statute of limitations.
Under Section 893.43 of Wisconsin Statutes, the general rule in this state is that an “action upon any contract, obligation, or liability, express or implied” is six years. This six-year clock starts on the date the debt “accrues.” So if you wait more than six years after the debt became due, you are forever barred from collecting the debt.
However, if the debtor pays some of what they owe you at any time within the six-year period, the statute of limitations is “tolled,” effectively stopping the clock. And if the debt involves an open credit account (i.e., a credit card), the statute of limitations resets entirely with each payment. A Wisconsin commercial collections attorney can advise you on the statute of limitations and help make sure you do not run out of time before collecting on your debt.
If it does become necessary to go to court and get a civil judgment against a delinquent debtor, keep in mind the judgment itself is little more than a piece of paper. Put another way, judgments do not enforce themselves. It may take months–even years–to collect on the judgment. Here again is where an Appleton commercial collections attorney can be an important resource.
The most common method for collecting on a judgment against a business is to place a lien on their property. A lien basically transfers the property to you until the debt is repaid in its entirety. If the debt itself is $25,000 or less and tied to a particular piece of tangible property, such as a leased motor vehicle or business equipment, you can file what is known as a replevin action, which is basically an order seizing the subject property and returning it to you as the rightful owner.
In extreme cases, it may be necessary to initiate an involuntary bankruptcy proceeding against the debtor. This means asking a federal judge to, in effect, liquidate the debtor’s assets in order to repay you and any other creditors. Again, this is an extreme option, and one that you should never attempt without the assistance of an experienced lawyer.
Whether you need help with a business-to-business or business-to-consumer debt collection, the experienced Appleton business & civil litigation attorneys at Hammett, Bellin & Oswald, LLC, stand ready to assist you. Call us today at 920-720-0000 to schedule an initial consultation.