Sometimes we’re faced with collecting money from a person or entity who can pay if they want to, but has set up their structure in a way so that they are often successful in not paying when they don’t want to.

Under such circumstances, it can be helpful to concentrate on what I like to call “pressure points”: places of discomfort that can influence the debtor’s willingness to pay. Those pressure points can involve creative use of the legal process. A couple of examples should help illustrate this.

In our first example, our debtor was a tavern, and our client (the creditor) had supplied foodstuffs, hard goods (crockery, glassware, silverware), and the bar’s tap system for beer. There was a UCC-1 security interest filed with respect to the tap system. Such a system involves the installation of tubing runs from a cold room (usually a walk-in cooler holding the kegs) to dispensing points (the “taps”) behind the bar.

Now, about the last thing a creditor usually wants is a repossessed used tap system pulled out of a debtor’s bar. But perhaps that is exactly the thing that should be pursued with the most vigor…or should I say, apparently pursued with the most vigor. In this type of situation, the debtor’s credit is going to be compromised, particularly in the trades. The likelihood of the debtor obtaining financing for another tap system is nil (they often run more than $20k). While the tap system is worth little to the creditor, it is, from the debtor’s immediate standpoint, virtually irreplaceable. Many taverns cannot realistically survive without such a system.

Accordingly, our inclusion of a cause of action for repossession (in New York, “replevin”) in the lawsuit, and the resulting concomitant danger of losing that tap system, was a powerful incentive for that debtor to enter into workout arrangements acceptable to our client. And the debtor stayed in business; a win-win result.

In our second example, the creditor (our client) held a substantial judgment against the debtor, and the debtor’s former principal was personally liable. Our client was fairly certain that debtor had substantial funds in the United Kingdom, unreachable by a New York court. There was nothing of any real substance reachable in New York, and the debtor had most of his expenses paid by an out-of-state trust. He was indeed a ‘professional debtor’…and he was good at it.

Our client knew a great deal about the individual debtor in question; he was highly visible in his community as a man about town—on charitable organization boards, at political events, in the social pages, at groundbreakings, and so on. He had a favorable public image.

In New York, as in many jurisdictions, there is wide-ranging latitude to conduct post-judgment depositions of not only the debtor, but of anyone else who might shed light on the debtor’s assets—what they are, where they are, and so on. Some of that can be determined from a debtor’s spending patterns. So in this case, as the creditor’s attorney, we prepared a number of deposition notices to people who knew or did business with the debtor who would be aware of at least some aspect of his spending: the president of his country club, the United Way chairman, the debtor’s adult children and wife, the maitre’d at the debtor’s favorite restaurant, the owner of the gym where the debtor worked out, the neighbors on each side of and across the street from the debtor’s home, the owner of the luxury car dealership patronized by the debtor, and so on.

Although we had no obligation to do so, we then sent copies of those subpoenas (there were ten or twelve of them) to the debtor’s attorney, advising him they would be served in ten days. Of course, the pressure point of this approach was not in actually serving the subpoenas, but in being able to do so.

Debtor’s counsel called us, chuckling. And then the matter settled with the magical appearance of a six-figure lump sum from a supposedly ‘assetless’ debtor.

So especially in larger matters, know your debtor to the greatest extent possible, be creative, and think about pressure points!

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If you’ve been injured because of another party’s negligence or recklessness, there are personal injury laws in place to protect you. You have the right to file a case against the responsible party, and an attorney serves as your advocate and guide at every step of the legal process. While not all cases are the same, here are some basic steps that all claims follow.

1. Initial Consultation

At the initial consultation, the attorney takes the time to learn about your case. You fill them in on important details, ask questions, and see if the working relationship will be the right fit. The attorney will provide you with information on what kinds of damages are available to you, how long the process could take, and any fees or costs involved.

2. Investigation

personal injury lawOnce you’ve decided to hire a personal injury law attorney, they’ll launch an investigation into the case. They’ll review police reports, medical records, and photos of the accident scene.

The attorney will also talk to witnesses and consult experts in the accident reconstruction and medical fields. This step gives the lawyer a clearer picture of what happened so that they can effectively advocate for you.

3. Demand Letter

Next, the attorney sends a demand letter to the opposing party, including their legal counsel and insurance company. The demand letter details what happened and the damages you’re seeking.

This opens the door to negotiations, which is how most injury cases are resolved. The letter requests a certain amount of compensation, the opposing side extends a counteroffer, and you continue to negotiate until a settlement is reached.

4. Filing a Lawsuit

If negotiations aren’t successful, the attorney will file a lawsuit in the county courts. This formally lodges your complaint against the defendant, who then must provide a response to the courts in which they answer the complaint.

5. Discovery

During this step, both sides exchange evidence pertinent to the case so that they can evaluate the strength of the other’s position and design a customized legal strategy. This involves sharing information and taking depositions and sworn statements. An attorney may need to file pretrial motions or request hearings to obtain information from the other side.

6. Mediation or Trial

In many personal injury law cases, a court-appointed mediator will try to restart settlement negotiations before proceeding to a courtroom trial. If an agreement isn’t reached, the case goes before a judge or jury. Both sides present their cases, and a verdict is rendered.

Property division is a major component of divorce cases, taking each asset into account and ensuring an even distribution. However, depending on the details of the negotiation, a few factors could alter the outcome. Here’s what to know before meeting with your lawyer to determine the best approach.

A Guide to Property Division in Divorce Cases

Q: What could happen to my property in a divorce?

New York is an equitable distribution state, which means that a judge will examine each spouse’s income and the property they own. They’ll account for the duration of the marriage and each party’s age and health. Depending on the details of the case, this could result in an even split or one party getting more than the other.
Marital property is defined as “all that which is not separate property”, so it kind of begs the question, “what is separate property?” Generally speaking, separate property is:

–Property owned before the marriage (but an increase in value of that property might be marital property);

–Money received as compensation for pain and suffering in a personal injury case (provided that it was not co-mingled with other marital property or in any other way treated so that it loses its character as separate property);

–Property that was inherited by one spouse (again, if it was not co-mingled with other marital property or in any other way treated so that it loses its character as separate property);

–Property held apart as separate because of an agreement between the parties (e.g., a properly drafted and enforceable pre-nuptual agreement).

Q: How do they decide who gets the house?

If it is marital property it is presumed to be a 50/50 split, even if title is in one party’s name alone but the property was acquired during the marriage.

If the couple has kids, the court may award the home to the custodial parent so that they can make use of its features and provide a comfortable life for the children. The court will also examine the ability to make mortgage payments and each party’s claim to the property to make its final decision.

Q: What if my property is completely separate from my spouse?

The court will determine when the property was acquired and the circumstances surrounding its ownership. If it was yours before marriage or was given as an inheritance and it was not co-mingled with marital property or funds, then it’s yours to keep. If it’s found that the other party contributed to the property’s value, it will be counted among the other assets and divided fairly (“equitaby”).

Q: What if I own a business or some type of professional practice?

If one party was running the business on their own, they’ll receive full ownership. Cases where both parties were working together to ensure success will cause the court to evaluate personal interests. They’ll typically grant full ownership to the one who was putting in the most work while ensuring that the other spouse gets compensation, or, alternatively, order a sale of the assets.

A creditor can legally send any bill that hasn’t been paid within 31 days to a debt collection agency. This can have negative consequences for your credit report and score, not to mention your wallet. Creditor and debtor laws are in place to protect both businesses and consumers, and it can be helpful to understand how these laws dictate the collections process. Here’s what you should know.

How Debts Are Collected

Unpaid bills that are 31 days late won’t automatically go into collection. The policies of the creditor determine how long they’ll retain the bill before sending it on.

In most cases, the creditor will first try to recoup the balance by calling you and sending you letters or emails. If these attempts are unsuccessful, the creditor will send the bill to a collection agency, sometimes as much as 180 days past the payment due date.

creditor and debtor lawFrom here on, the debt collector tries to acquire the unpaid balance. They’ll verify the debtor’s identity, which they can do by confirming certain information with the debtor or with the debtor’s family or friends. However, the agency cannot discuss the debt with anyone but the debtor.

Then, they’ll typically send a letter that validates the debt, including the amount owed and the name of the original creditor. They’ll follow up with phone calls and more letters to try to get the debtor to pay.

Once the debt is paid, the communication stops and the case is closed. If the debtor doesn’t pay, the collection agency can hire a creditor and debtor law attorney and file a lawsuit.

How to Avoid Collections

The most effective way to avoid collections is to pay your bills on time. If you need extra time paying off a balance, contact the creditor directly; most will be willing to work with you. When bills begin to mount, revisit your monthly budget and see where cuts can be made.

Also, there are presently restrictions in place that prevent bill collectors from engaging in certain collection activity, as a result of the COVID-19 situation. You should recognize, however, that those restrictions are not expected to last long, especially in New York State (except for New York City, which has created its own set of restrictions).

If debts reach a point where they become truly unmanageable and you’re concerned about debt collectors, you may have viable options worth exploring, such as debt consolidation/negotiation or bankruptcy. The attorneys at Pirrello, Personte and Feder have a practice focus in both of those areas, and stand ready to assist you, if necessary.