The media has brought attention to debt collection firms that have failed to deliver proper notice of debt collection actions to debtors. The result of these investigations highlights the judgments entered without cause and disciplinary actions against the firms for failing to deliver solid service of the court documents. Not much is mentioned about the cost to the creditors who entrusted their claims and potential recovery to the firm. We want you to know what it costs you if the service of your debt collection papers is not solid.
Throughout the life of a debt collection claim, you may be required to give notice. This can include notice of default, notice of non-payment, notice of pendency, notice under mechanics lien, notice that a debt collection claim has been filed or, that a judgment has been entered.
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The route your debt collection case takes depends upon the nature of the debt, your underlying agreement with the client, their financial situation, and which NY debt collection options you’re open to. Factors that can impact your decision include the amount owed, the non-paying customer’s location, the underlying agreement between the parties, the customer’s financial situation, and the creditor’s attitude towards litigation.
Below are the debt collection options available in New York.
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Ms. Jocelyn Nager, the managing partner of Frank, Frank, Goldstein & Nager P.C., a New York debt collection law firm, has been named a “Super Lawyer” for the fifth consecutive year.
Super Lawyers is a rating service that features outstanding lawyers from more than 70 practice areas. The list recognizes no more than 5 percent of attorneys in each state. Lawyers featured have attained a high-degree of peer recognition and professional achievement and are evaluated through rigorous independent research, peer nominations, and peer evaluations.
This is the second honor bestowed upon Ms. Nager this year. In September, she received an AV Preeminent rating by Martindale-Hubbell — the highest possible rating a lawyer can receive — an honor she’s received several years running. The “AV” rating is awarded to those who hold the highest ethical standards and legal ability.
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To ensure timely payments from their customers, many companies have clauses in their agreements or invoices with terms of interest for late payments. It is not uncommon for invoices to state they must be paid within 30 days, after which the balance shall accrue at 1.5% interest per month.
There is no set limit in New York for how much interest may be charged, but the amount should be reasonable and not excessive. The interest rate described above has been ruled as acceptable by the courts in New York and is widely used. Beyond said interest provisions, businesses may seek additional remedies. For instance, if a customer defaults in payment but then agrees upon a subsequent arrangement to pay the outstanding balance, the business may want additional interest because of the defendant’s initial default. The business may insist on an agreement wherein the customer must pay the balance plus interest “compounded monthly” at a certain percentage until paid in full.
Continue reading “Can You Charge Your Client Compound Interest for Late Payments?”