Personal Debt Collection in Massachusetts

Personal debt collection is different from other types of debt collection. Essentially, the debt belongs to a single individual, and not to a business or corporation. Examples of personal debt include unpaid credit card accounts, unpaid medical billing accounts, and unpaid loans where liens have not been effective in recuperating the owed amounts.

In Massachusetts, a law firm can help you recover money owed to you by individuals. These personal debts are litigant cases often resolved outside of court. However, if the debtor is unwilling to pay or resolve outside of court, the Massachusetts law firm has to proceed through the courts. There is a general process to this entire situation.

First, the Demand Letter

Demand letters are drafted to notify the debtors that they owe money and what is expected of them for repayment. Usually, debtors will take note that you have hired a lawyer to recoup the money owed and will respond in one of two ways. Either they will pay the requested amount or make arrangements to pay the debt, or they will ignore the notice and continue on.

More than one demand letter may be mailed before further action is taken. It is up to you on whether or not you want to issue one or five demand letters before requesting a court hearing. Typically, these issues will resolve themselves before a court hearing is requested.

Next, Filing Suit and Appearing in Court

When there is no response or no action on the demand letters sent, the law firm proceeds with a court filing. This requests a hearing between you, the plaintiff/ creditor and the debtor/ defendant. The court filing documents are copied and sent to each individual debtor with a date and time to appear. The debtor can resolve the issue prior to the court date if he/she chooses.

If the debtor chooses not to make contact with the law firm you hired and resolve the issue, then the court hearing continues as planned. You will need to appear because you are the one requesting payment. Your lawyer will be present as well.

The debtor can appear alone or with counsel. It’s quite common for debtors to either appear representing themselves (for lack of money) or not appear at all. When a debtor doesn’t appear at the hearing, he or she is essentially saying that he/she accepts and acknowledges the decision of the court to rule in the creditor’s favor. The amount owed is upheld as legitimate, and the judge rules in your favor.

If the debtor does appear, he/she must prove to the courts that he/she is insolvent, or unable to pay the requested amount. The judge may attempt to provide the debtor with payment options or look at the debtor’s income to determine if payment can be made at this time. If the debtor has sufficient income, but refuses a payment option, the judge may decide to establish wage garnishment.

Wage garnishment means the court sends a document to the debtor’s employer. The document stipulates that the “x” amount of dollars should be removed from each paycheck and sent to the law firm you hired. The frequency of the garnished amounts depends on how often the debtor is paid. Your lawyer deducts his/her contingency fee, and then sends you the remainder.

Ruling in Favor of the Debtor

When you provide clear proof that money is owed, it is unusual for the courts to rule in favor of the debtor. Some of the ways in which this happens include:

• The debtor is dead, and therefore cannot pay you anything.
• The debtor is no longer of sound mind and working body. No money is to be made from someone who can’t comprehend what is happening.
• The debtor is homeless and has no assets.
• The debtor’s lawyer makes an excellent case for not paying the requested amount owed.
• The debtor appeals a prior case decision and wins this round.

If the debtor has a spouse, it may be possible to recoup the money from the spouse. This is a little trickier because you would have to sue the spouse to get the money while including the name of the actual debtor involved in the lawsuit. The judge could rule against you in this type of suit as well, so weigh your options with your lawyer carefully.

Finally, Liens Are Another Option

Liens against property and assets in a Massachusett legal setting are very time-consuming. Unless the amount owed to you is substantial and you can’t seem to get it any other way, liens aren’t recommended. However, a Massachusett judge can attach a lien against all of the following:

• Open bank accounts
• Estates and real estate property of any kind owned by the debtor
• Vehicles
• Federal and/or state tax refunds
• Other assets that could be sold to regain the money owed

Collection via this method can take several years. At any rate the debtor cannot sell anything of value against which a judgement or lien is placed. Accounts may not be closed either, forcing the debtor to keep it open until the debts are paid. Out of all of the above lien options, the fastest is usually the tax refunds since the paperwork alerting government agencies goes into effect before the debtor files for refunds.