NY Debt Collection Litigation: Keep Records

Related imageDealing with slow or non-paying customers or clients?

Anticipate that you might need to pursue NY debt collection litigation efforts and keep records.

What should you keep?
All electronic and physical documents relating to the business relationship should be kept in anticipation of debt collection litigation.

“Records” include the credit file, underlying business transactions, billing, collection efforts and more.  These “records” could be used as “evidence” 

to support your case to prove that you are owed the monies.

The records that would be needed for your New York debt collection, arbitration or litigation include all communications, correspondence, writings, notes, memos, that relate to the business relationship with your customer.

These include:

A Credit File:  Credit application and guaranty of account

Sales Documents: Contract, purchase orders, proofs of delivery, change orders

Billing and Payment history: Bills, invoices, statements, payments, credit memos

Disputes and/correspondence

How long should you keep these records?

The documents or records should be kept for the length of time for which you are able to bring an action to recover the unpaid monies owed you.

Every state has its own rules as to how long a creditor can seek to recover unpaid monies. In New York debt collection litigation, arbitration and mediation, you have six years to bring an action for services rendered, arguably four years for goods sold and delivered.  Keep in mind that there are certain conditions that could extend the time including on account payments from the customer.

Should you have a written document retention policy?  Why?

Yes, you must have a written document retention (and destruction) policy. The policy is important and could come under scrutiny while testifying in your NY debt collection litigation case. The policy must be communicated to all employees and agents to enlist compliance.

The purpose of the retention policy is to insure all important records are retained for the legally required period.  Intentional destruction of “evidence” may be punishable by law.

What should you do with all the paper?

If you are still working with paper documents, you need not keep the paper forever.

Your document retention policy (and destruction policy) should include provisions to keep the paper, scan the originals to an electronic format and maintain them in a responsible manner insuring that you have access to them.

Is there a one size fits all document retention policy?

The answer is no. Based upon your industry and laws that govern your business, you may be required to keep records for a predetermined period of time. However, every company sets it’ own policies and procedures for document retention (and destruction) based upon it’s business model.

Do you have questions about internal controls, policies and procedures for credit and collections, wish to assess collectability of claim(s) or discuss issues facing your business? Contact Jocelyn Nager jnager@ffgnesqs.com 212-686-0100 ext 12 for more information.