Are you going through a difficult financial situation? Are you the debtor, the creditor or some of the parties involved? Our debt collection attorney in New York can help. Being involved in debt can be distressing and very stressful if not handled properly.
Contact us today to tell us about your case and discuss the best course of action. At Ortiz & Ortiz we see cases like yours every day and our clients tell us that they are relieved to know that there are alternatives. Read on to find out what our attorneys can advise you on.
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Best Debt Collection and Debt Collection Attorney in New York City
Ortiz & Ortiz LLP is a law firm that advises individuals, entrepreneurs and businesses on bankruptcy, debt consolidation, commercial debt collection, civil litigation and judgment enforcement in New York.
Do you need help with any of these issues? Our experienced bankruptcy and financial recovery attorneys have been serving the community for over 30 years. Our offices are in Queens and Manhattan, however, we provide virtual consultations in all five boroughs and Long Island.
At Ortiz & Ortiz we represent not just debtor’s in a bankruptcy proceeding, but creditors and interested parties as well. Whether it is to make sure you get your fair share of liquidated assets in a Ch. 7 bankruptcy or to protect your interests in the plans filed under Ch. 11 or Ch. 13, we have helped clients recover some or all of their money by judiciously advocating for their stake in the debtor’s estate.
What can you do if you are not paid what you are owed?
If you are a business, a creditor or a lender who is owed money and you want it to be paid back, it is advisable to have an attorney from New York specialized in commercial collection to advise you. Whether that money is owed on a credit card, contract, promissory note or any other obligation, leave it in the hands of an attorney or collection company in New York that has experience in lawsuits and creditors’ rights.
What is a debt collection agency and how does it work?
- Debt collectors generally operate through a debt collection agency. Note that some of these debt collectors are attorneys.
- Collection agencies act as an intermediary between you as the creditor and the debtor, which may be an individual or a business, institution or organization.
- You as the creditor pay the collector a percentage of the total debt, generally between 25% and 50%.
- Collection agencies can collect delinquent debts of all types: credit cards, medical loans, car loans, personal loans, commercial loans, student loans, utility bills, cell phone bills, among others.
How can a collection company help you?
Commercial Debt Collection
All businesses have receivables. These are payments owed to the business and many times there is no time or people who can do the work of collecting. In that sense, whether accounts receivable have a successful outcome depends on how they are handled. Having a professional or a collection company to take care of this, to ensure that payments are as agreed in the beginning, can free you from a huge burden.
In business there are two types of debt. Which one you experience will depend on the products or services you provide and to whom.
- Commercial receivables: is when there is a financial obligation between two commercial entities.
- Consumer collections: is a claim made by a company that has provided goods or services to an individual.
Legal debt collection
If you have tried all options and have not been successful in getting the amounts owed paid, it is time to go to court in New York. At this step, it is important to seek the advice of an experienced New York judgment attorney, as they can guide you through the process.
It is a simple process:
- It starts with the filing of the summons and then follows with the lawsuit before the New York Court.
- The next step is three possible scenarios:
- The case settles once the summons and complaint are served.
- The debtor responds or attempts to dismiss the case. In this scenario the litigation continues.
- The debtor does not appear and/or does not respond. In this case judgment is entered and enforced to obtain payment of your debt collection claim in New York.
- So that you can concentrate on your business and not worry about paying debts.
- To get the debts paid as originally agreed.
- Someone who can understand the New York court and can handle the legal side of the matter.
What to do if the debtor files for bankruptcy?
Many debtors conclude that the best solution is to file for bankruptcy. Individuals do so through Chapter 7 or 13, while businesses file for Chapter 11.
1. Chapter 7 Bankruptcy Filing
When a debtor files for bankruptcy under Chapter 7 of the Bankruptcy Code, it means that he or she has no money to pay debts. Therefore, all of the debtor’s assets will be liquidated in order to obtain money to pay creditors.
Although this liquidation is done by the bankruptcy court, it is important that you as a creditor be aware of the assets that will be liquidated so that you receive your fair share. In that sense, a good option is to have counsel. Someone will see to it that you receive a fair share of the liquidated assets in order to compensate you for the time the debtor has been in default on your credit, contract or whatever.
Also, in the Chapter 7 bankruptcy filing, there is a time when you as a creditor can object to the discharge of debts in case the debtor has committed some type of fraud. At this stage it will be crucial to have an attorney take your case.
Keep in mind which debts can be discharged by Chapter 7:
- Medical Bills.
- Vehicle loans.
- Credit card debts.
- Payday and personal loans.
- Utility bills.
- Credit card judgment debts and collection agency debts.
And which debts Chapter 7 cannot erase:
- Student loans mostly.
- Alimony and child support.
- Tax debts and other penalties or debts you owe the government.
2. Chapter 11 or 13 bankruptcy filing.
If you have been pursuing a debtor for some time and have not gotten satisfactory answers, the best way out may be for that debtor to file for bankruptcy. We discussed Chapter 7 bankruptcy above, but there are other Chapters that can be subject to bankruptcy: Chapter 11 and Chapter 13.
Both Chapter 11 and Chapter 13 deal with financial reorganization. Chapter 13, intended only for individuals, is for people who have regular assets and income. It consists of a 3 to 5 year payment plan proposed by the debtor.
Chapter 11, aimed mainly at companies and also at some individuals, allows for a financial reorganization orchestrated by the debtor himself. The special feature is that the debtor company that files for Chapter 11 can continue to operate normally.
Why rely on a New York collection attorney when the debtor, whether a company or an individual, files for Chapter 11 or 13 of the Bankruptcy Code?
- Through the advice of bankruptcy attorneys, you may be able to recover some or all of the money owed.
- You will be able to obtain a judicious defense of the debtor’s assets. In that line, you will be able to actively participate in the meeting with the creditors during the bankruptcy filing process.
- An experienced collection attorney in New York with will be able to ensure that the debtor company or person does not transfer assets to third parties during the process.
Thinking of filing for bankruptcy?
If you are considering bankruptcy as a solution to your debts, it is probably because you are overwhelmed with debts. You should know that there are bankruptcy options for individuals and businesses. You as an individual debtor must file for Chapter 7 or 13 bankruptcy, while businesses file for Chapter 11 bankruptcy.
Before making your decision, consider the following:
1. Take a hard look at your financial situation
No one likes to have debt, but many times we don’t even know we have it. Therefore, if you are thinking about filing for bankruptcy, the first step is to get your finances in order. That is to say, to know what is the starting point.
At this stage it will be vital to make a count of the debts you have, and the amounts and interests of each one. Also, know what type of debts you have. If these are credit card debts, medical debts, student loan debts, unpaid taxes, child support, among others.
Some points to consider:
- Use a spreadsheet to organize your debts in general. Separate in columns the type of debt, the outstanding payments, the amount of interest, the total amount, among other items.
- Organize all the information in chronological order. This will allow you to know which debts are most overdue and should be a priority.
- Be honest with yourself and with whoever is advising you. Many times having debts creates embarrassment, but the debts are not going to go away if you don’t write them down.
Note: If you really don’t know if you have debts and you are totally lost, read our article How to know if I have debts in the United States. And if you already know you have debts and are apprehensive about what might happen, check out our articles: What if I get sued and can’t pay and Can I go to jail for debts.
2. Evaluate what to do about your debts
Being in debt may seem like the end of the world, but good news! There are ways to get out of it. How? Well, first you need to analyze what level of debt you have. With that information you can make a plan and consider various options.
- Filing for bankruptcy: You file a petition with the Bankruptcy Court under Chapter 7, 11 or 13 of the U.S. Code stating that you cannot pay your debts. The chapter under which you file for bankruptcy will depend on the type of debt, the amount owed, whether you have regular income, or whether you have assets that you can liquidate to pay your debts.
- Debt consolidation: Is a strategy through which you can reduce the interest rate and monthly payment on your bills or other debts by combining all of them into one payment.
Note: Before meeting with debt collection attorneys, read a little about what these options are all about. Check out our article and review whether it is better to file bankruptcy or consolidate debt. If you want to go more in depth about filing for bankruptcy, review the consequences of bankruptcy in the United States.
3. Know how to file bankruptcy and under which chapter it is best to file bankruptcy.
Filing for bankruptcy is often an unfamiliar situation. Therefore, be well informed and, if possible, talk to someone who has gone through this process. There are several steps to filing for bankruptcy in New York, but there are also several types of bankruptcy that you can file for.
Depending on your financial situation, there will be one that suits you better than another. There are different types of bankruptcies, but the most common for both individuals and businesses are Chapter 7, Chapter 11 and Chapter 13.
- Chapter 7: also called liquidation bankruptcy, this type of bankruptcy is a more limited process that consists of liquidating assets in order to pay debts to creditors and lenders.
- Chapter 11: mainly aimed at businesses, Chapter 11 bankruptcy refers to financial reorganization and, while this is taking place, the company may continue to operate.
- Chapter 13: this is the bankruptcy of salaried or regular income earners. In this type of bankruptcy, the debtor proposes a payment plan in which it reorganizes its finances with the objective of paying creditors or lenders within 3 to 5 years.
Note: Also read about the differences between filing for Chapter 7 and Chapter 13 bankruptcy.
4. Do’s and Don’ts After Bankruptcy
Once you have made the decision to file for bankruptcy, the only thing left to do is to wait for the bankruptcy process to be completed and the bankruptcy to become effective. After bankruptcy, the questions about what you can and cannot do begin to arise.
Among the main consequences of bankruptcy, and certainly the most obvious, is the deterioration of the credit score. Although the credit score can be recovered, this may take time.
There will also be other doubts such as whether you can take out a personal loan after the bankruptcy, buying a car after bankruptcy, buying a house after bankruptcy, home refinance after bankruptcy, if the bankruptcy affects your spouse, among others.
Note: See also what happens in other cases. For example, check out our articles on what happens to medical debt if you file bankruptcy or if bankruptcy stops wage garnishment.
5. What behaviors can creditors engage in when collecting debts?
Many times being in debt not only weighs on one’s conscience, but there are creditors, lenders, collection companies, and others, on top of you, collecting. While it is their job to collect in order to get paid what is owed, there are also limits.
And the Fair Debt Collection Practices Act (FDCPA) is in place in the United States to ensure that collection agents do not engage in bad practices. This is the main law governing debt collection and prohibits collection companies from engaging in abusive, unfair or deceptive practices in order to collect debts.
Restrictions the law places on debt collector communications:
- Time and place. Debt collectors may not contact you at an unusual time or place, nor may they contact you before 8 am and after 9 pm. The debt collector may not come to your work to solicit payment of debts.
- Harassment. They may not harass you by telephone or in any other way. And this refers to you and anyone close to you such as a family member, co-worker, friend, among others.
- Attorney representation. If you are receiving advice from a New York collection attorney, the debt collector must communicate directly with the attorney and not with you.
- Threatening legal action when it is not intended.
- Threatening to arrest the debtor.
- Impersonate a government agent, federal or otherwise, for the purpose of debt collection or threaten retaliation if it is not paid.
Why hire our New York collection attorney?
If you have an unpaid debt and the debtor filed for bankruptcy or you are the one being charged, either through a commercial or consumer debt collection, you are in the right place. Being in your situation can be very distressing, especially if you are not familiar with the process or the legal subject matter.
Should you require advice and guidance in the process, do not hesitate to contact our experienced New York bankruptcy attorneys. You can contact us through an online consultation, send an email through our website, or simply call us directly.
Contact us today to learn more about your case.