Knowledge is power. Same is true in commercial debt collection. Understanding your client’s business, where their cash flow comes from and knowing their customer base, will get you paid.
Here’s how. Our client, worked as a subcontractor to a plumber at Columbia University. Client had successfully completed his work but was not getting paid. The contractor who engaged the client to do the job claimed non payment because they were not being paid.
Knowing that “pay when paid” is unenforceable in New York and that the client needed the cash flow to operate his own business, client turned the claim over for immediate suit.
The summons and complaint were E-filed the same day. Once filed the summons went out for service and, once served, the countdown began until judgment could be submitted to the Clerk.
In the meantime, client was maintaining contact with the powers that be at Columbia letting them know he hadn’t been paid.
When the contractor’s time to respond to the summons and complaint was up, we immediately filed the necessary paperwork to obtain a default judgment.
We knew right from the start that time was of the essence to be able to seize the monies owed to the contractor at Columbia before they would be paid out to him. We therefore chose to file the action in a county that had less of a waiting period for judgment to be entered. The goal as with all debt collection cases is to obtain a judgment as quickly as possible. The goal is to catch as many balls as you can to fill your bucket. You want to make sure to restrain any monies that may be due and owing to your non-paying customer or in this case contractor, before the monies are paid over.
Since our client knew that Columbia was still holding monies that were owed to the plumbing contractor, we served a restraining notice on Columbia and froze the account. Actually we froze twice the amount of the judgment. Complying with a restraining notice in New York requires the recipient to hold up to twice the judgment amount.
Once the account was “frozen”, the nonpaying contractor contacted client directly attempting to play “let’s make a deal”. After full payment of the judgment, we released any surplus being held.
In this case client’s knowledge of the debtor’s business including ongoing projects and monies owed coupled with our turn key debt collection and up-to-date knowledge of the Courts’ status resulted in quick recovery.
It should be noted that not all cases can be handled in the identical matter. In this case the contractor did not defend the action. By ignoring the action, the summons and complaint client was able to secure a default judgment.
