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Small Debt Collection During the Pandemic
If your customers or clients are filing for bankruptcy while new small debt collection cases are prohibited until after the health emergency, our Boston debt collection lawyers can help you. If you are a Massachusetts business with customers in other states, you have to negotiate the maze of limits on debt collection during the Covid-19 pandemic. You may not take debtors’ stimulus funds, and you may not be able to garnish wages. You can act on existing court orders.
Your bankrupt customer filed the legal action concerning his ability to meet his or her financial obligations, therefore, you may respond under the rules of the U.S. Bankruptcy Court. The U.S. Bankruptcy Court helps businesses reorganize and repay their debts. U.S. Bankruptcy Courts have reopened behind plexiglass shields, but your debtor may still be able to benefit from the extended protection of the CARES Act.
The Covid-19 Pandemic’s Impact on U.S. Bankruptcy Rules
With hopeful businesses filing for Chapter 11 reorganization, the bankruptcy court increased the credit limits necessary to file for bankruptcy. With business insurance and taxes paid in full, a business needs only to show financial losses directly attributable to the covid-19 pandemic to file.
The Coronavirus Aid, Relief, and Economic Security Act
Federal bankruptcy rules, altered by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, allow debtors already in Chapter 13 repayment plans to reduce payments and increase the length of their repayment plans to seven years if they prove they were adversely affected by the pandemic. The Cares Act bankruptcy modifications will expire on March 27, 2021.
Massachusetts Debt Collection Attorney
Our Massachusetts debt collection attorneys with 50 years of experience representing business clients in commercial debt collection matters can strategize a small debt collection plan within the constraints of the Covid-19 pandemic. If all your sympathetic efforts to help your customer pay his delinquent bill fail, our Massachusetts commercial collection attorney charges no fees until our firm collects money for you. Our commercial collections lawyer can file liens, bring lawsuits in small claims court, and garnish wages pursuant to federal, state, and local laws nationwide. As business attorneys, rather than a commercial collection agency, our law firm collects interest on your delinquent debts.
Online Mediation and Arbitration
In our 2020 COVID-19 world, video conferences and zoom meetings may be the safer, easier, and faster way to collect debts. The JAMS Foundation offers neutral dispute resolution services that you and your delinquent customers can use to negotiate payment plans with consequences. Tutorials on the JAMS website explain the use of its video conferencing platform.
The American Arbitration Association (AAA) also offers online arbitration and mediation services as an alternative to lawsuits during the COVID-19 pandemic. The nonprofit AAA schedules hearings with independent neutral arbitrators and mediators who know the outcome of courses of action and can settle most issues in the best interests of both parties.
Chapter 7 Bankruptcy
If your customer filed Chapter 7 Bankruptcy, he or she hopes to discharge unsecured debts. A trustee presides over the bankruptcy proceedings. The trustee holds a 341 hearing for creditors approximately 30 days after the debtor files for bankruptcy. The trustee can sell the non-exempt property to pay creditors. If the trustee won’t discharge the petitioner’s debts, he or she can convert his petition to Chapter 13 bankruptcy.
Chapter 13 Bankruptcy
Chapter 13 allows debtors to repay their financial obligations over a period of three to five years, now seven years due to the covid-19 pandemic. The bankruptcy trustee can disperse payments to you on your secured debt.
Chapter 11 Bankruptcy
Chapter 11 Bankruptcy helps small businesses sell assets to renegotiate their debts. Chapter 11 Bankruptcy helps small businesses reorganize and change the terms of their business loans. Small businesses may be able to strip business liens from their home or primary business property under Chapter 11.
Debt Collection in Bankruptcy Court
The trustee reviews all paperwork that the debtors file in bankruptcy court. The trustee especially examines the debtors’ financial transactions in the quarter or year before he or she filed for bankruptcy. The trustee can order payments made and assets transferred back into the debtor’s estate if the payment or transfer was fraudulent. The trustee can pay legitimate lien holders with the recovered money. The trustee can also alter the terms of your debt if your secured property is the debtor’s primary residence or business address or if your secured property is essential in the operation of his or her business. You can recover your property if the debtor defaults on his repayment plan.
If you can prove that your debtor lied either in the bankruptcy proceeding or when he borrowed money from you, our commercial debt collection attorney can file an adversary proceeding totally separate from the bankruptcy case. The debtor must affirm or dispute each alleged fact. The trustee can have your debtor investigated for fraud.
Business owners are “jointly and severally” responsible for business debts and assets. If a partner to a business file for bankruptcy, his partners must repay the debt. Commercial business loans may be based on a debtor’s personal credit or personal property. The bankruptcy trustee can sever the debtor’s right to own the real property used as collateral.
Goldberg and Oriel
Call or contact our Massachusetts debt collection attorney today for a review of your debt portfolio including your customers who have filed for bankruptcy. Our commercial collections attorney recovers the maximum allowable amount on your past due accounts. All consultations are free, and a representative from our law office will respond within 24 hours of receiving your request.