Do you ask your client if they’ve previously filed for bankruptcy? If not, you might want to.
We are encouraged not to discriminate and to do business with individuals and companies who once filed for bankruptcy. After all, bankruptcy affords many companies relief, allowing them time to become better payors.
But did you know that if your client previously filed for bankruptcy, it may affect your debt collection abilites?
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When a company incurs a debt but does not have enough cash to pay, it may issue a promissory note to memorialize the debt in writing. If you want to get paid in the future, it’s important to make sure your promissory note isn’t unenforceable.
For instance, if a person provides services to a start-up company that is unable to pay because it is low on cash, the start-up can issue a promissory note. The note indicates the monetary value of the person’s services and the date said value is to be paid by. Presumably, the note would be issued in conjunction with the services provided. The note is valid and enforceable because it is given in exchange for the services provided.
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Sometimes New York courts require creditors to post a bond to maintain their debt collection case in the state’s courts. Could you be required to post a bond to maintain your New York debt collection case?
Companies incorporated in New York, as well as ones incorporated in another state but authorized in New York, generally will not be required to post a bond.
But companies “doing business” in New York that are not yet registered in the state may be required to post a bond to maintain their debt collection case.
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Unhappy with the decision rendered by the arbitrator(s) in your New York debt collection case? If so, you may have another chance to win your case by asking for a trial de novo.
Parties wishing to get another bite at the apple in the “Big Apple” can, without specifying a reason, ask for a do-over. The party that files for a trial, when allowed to do so, can make the arbitrator’s decision disappear and start anew “de novo.”
Many of the New York courts require arbitration for cases below a specific dollar amount. Retired judges or others appointed by the court act as arbitrators. The arbitrators listen to testimony and apply the same law that a judge would.
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