When it comes to guarantees, it is better to get them than to give them! A guaranty agreement obligates a party for the liability of another party. Arizona law requires that a guaranty agreement must be in writing. If you are a lender, it is always a good idea to obtain a guaranty agreement on substantial loans.

In a commercial transaction between legal entities with limited liability, individuals often sign guaranty agreements. The individuals are often the owners, members or managers of the entity. These individuals are typically reluctant to agree to be personally liable for the loan to the entity since it was created to shield them from liability, but the extension of credit to a corporate entity without any personal guarantees accompanying it could be a suspect transaction.

Arizona is a community property state. If your individual guarantor is married, both spouses must sign the guaranty in order to bind the marital community property.

Before you extend credit to a corporate entity, it is imperative that you investigate its creditworthiness and ability to repay the debt. If there is any indication that the corporation is not creditworthy, a personal guaranty by the principals, and their spouses, of the corporation should be required.

If you have any questions regarding personal guarantees or you need assistance drafting a guarantee document, please contact Windtberg & Zdancewicz, PLC today.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of both creditors and debtors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

 

When a debtor files a Chapter 7 bankruptcy case, the automatic stay is immediately effective. The stay prohibits further collection efforts by a creditor while the bankruptcy is pending. What does a secured creditor do to protect its collateral?

If you hold the mortgage to a debtor’s home or a lien on a vehicle, the debtor can only keep possession of pledged collateral in a Chapter 7 if the payments are current or the lender agrees to new payment terms. If the debtor is seriously delinquent on payments under the mortgage or vehicle loan, you should retain an attorney to assist you with applying for relief from the automatic stay.

In sum, a Chapter 7 debtor has one of four options:

• Keep the payments current
• Redeem the vehicle for its value (usually NADA wholesale or its equivalent)
• Surrender the vehicle
• Reaffirm the debt

If you need assistance protecting your rights as a secured lender in a Chapter 7 bankruptcy case, contact an attorney at Windtberg & Zdancewicz today.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

 

Creditors of a company facing severe financial issues may consider “forcing” the company into bankruptcy. Often a business appears to be forced into filing for bankruptcy protection as a result of creditor’s actions. For example, to seek shelter from foreclosure proceedings or other lawsuits. However, this is not what is meant by involuntary bankruptcy because the company made the final decision to file the bankruptcy case.

An involuntary bankruptcy occurs when the company does not consent to the filing. Section 303 of the Bankruptcy Code sets forth the requirements that must be met for an involuntary bankruptcy. Below is a general summary:

• If the company has 12 or more creditors, 3 or more creditors whose claims in the aggregate total at least $14,425, must sign the petition. The $14,425 amount is adjusted every three years, with the next adjustment due in April 2013.
• If the company has less than 12 creditors, only 1 qualifying creditor is needed
• If the company files a timely objection to the involuntary filing, in order for the involuntary bankruptcy to proceed, it must also
  •  generally not be paying its undisputed debts as they become due, OR
  • have a custodian appointed within the past 120 days to take control of substantially all of its assets.

Creditors are often reluctant to pursue forcing a bankruptcy filing because it exposes the creditor to liability for costs, attorney’s fees, damages and possibly punitive damages. Involuntary bankruptcy is typically used circumstances exist.

If you are interested in learning more about creditor’s rights in bankruptcy, including pursuing an involuntary bankruptcy, contact Windtberg & Zdancewicz today.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation. We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

 

In this economy, everyone is looking to find new revenue. This invariably leads them to that stack of old accounts receivable that have been ignored while they were dealing with paying customers. But, before you begin your collection efforts, consider the following things:

• If you have never sued over unpaid invoices, you will want your attorney to review your documents to make sure they are ready for collections action. For more information, read our blog titled “Will your paperwork support a lawsuit?”
• Consider your public relations in your legal strategy. Customers do not like “bill collectors,” so remember to take actions that are representative of how you want to be viewed in how your treat your customers.
• Don’t delay. The quicker you begin your collection efforts the more likely you will succeed in getting paid.
• Document all correspondence with your customers. Whether it is a telephone conversation or a letter requesting payment, it is important to keep a complete file.

If the stress and headache are too much, contact the attorneys at Windtberg & Zdancewicz to manage your collection efforts for you.

If you are interested in learning more about your rights as a creditor, contact Windtberg & Zdancewicz, PLC, at 480.584.5660.  Our office is conveniently located in Tempe, Arizona. We handle all matters related to collection of past due accounts, including a creditor’s rights against a bankrupt borrower.  Our attorneys handle cases from pre-litigation collection through litigation, obtaining and enforcing judgments to collect what our clients are owed.

It is a fairly common for a debtor to propose a Chapter 13 plan proposing to make payments on a secured vehicle claim then later to file an amended plan proposing to surrender the vehicle.  A plan will often say that the creditor will accept the surrender of the vehicle in full satisfaction of the debt. The question is, should you?

If at all possible, a vehicle lender should inspect the car, truck, motorcycle, or boat before the proposed surrender or before choosing to file a motion for relief from the automatic stay. It is possible the auto has been irreparably damaged or gutted, which is the reason the debtor wanted to relinquish it. Once the creditor has accepted the vehicle in satisfaction of the debt, it is difficult to go backwards and try to undo the deal.

If inspection of the vehicle is not possible, then your attorney should get written confirmation from the debtor or the debtor’s attorney that the vehicle is in good condition. This provides the creditor information about any damage to the vehicle before being stuck with a confirmed plan or having relief from stay.  A written statement also provides the creditor with evidence if the debtor lies about the condition of the vehicle.

If you would like to learn more or you need assistance a customer’s bankruptcy case, contact Windtberg & Zdancewicz for help.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

 

When you are trying to enforce a debt,  your lawsuit is typically only as good as your paperwork.  Thus, when you contract or invoices have serious errors, it provides the other side with easy defenses to your allegations.  As a creditor’s rights law firm, we help our clients prepare or revise their existing documentation to ensure that you are prepared if litigation should arise.

Even if your paperwork is solid, you also have to be concerned about human error.  For instance, it is common for a credit application or invoice to not have the borrower’s correct name.  This is especially true when it comes to incorporated entities.

If a client’s name is John Doe, but his business name is John Doe Contractors, LLC, it can be confusing if the invoice only says John Doe.  It can be even more complicated if the customer writes John Doe Contractors, Inc. instead of LLC.  These distinctions are important when it comes to determining who you should sue.

When you are dealing with business entities as a prospective borrower or customer, you should always investigate its corporate status. You can do a simple search on the Arizona Corporation Commission or Arizona Secretary of State website or have your attorney check into it for you.  If you cannot locate a valid corporate entity under your customer’s name, you should ask more questions.

It is better to verify who you are dealing with in the beginning of your business relationship when getting the information is easier.  When it comes time to legally enforce your claims, your customer is less likely to be forthcoming.

If you need assistance creating the proper paperwork or with collecting a debt, contact  Windtberg & Zdancewicz today.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of creditors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

 

Banks and lenders of construction loans cannot afford to be as trusting as they were years ago. Previously, it seemed even the bad loans got paid, so errors in loan documents or or lapses in oversight didn’t get caught.  The result was lenders got to be too trusting and somewhat lazy.

Construction lenders must be vigilant.  You don’t want to advance a substantial amount of money only to realize there are major issues after the fact.  Devoting a little time and due diligence to each project can save a lender time, money and embarrassment. Below are a few tips:

• Get to know your customers and their projects
• Occasionally drive past the construction site to confirm work is being performed
• If the site doesn’t appear to be progressing in accordance with the financial draws that have taken place, conduct a closer inspection

While these steps seem simple, it is easy for them to fall through the cracks when you are busy.  Just remember, however, a simple drive-by could actually save you millions of dollars.

If you need assistance collecting a construction loan, contact Windtberg & Zdancewicz today.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of  creditors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

In today’s economy, businesses big and small are looking to find new sources of revenue.  This often leads to a pile of old accounts receivable that have not been touched in months, or even longer.  Many business owners do not worry about collections while business is good, but when they need to collect, a lot of time has passed.

If you are starting collections for the first time, there are two common issues to consider:

• A creditor who has never filed a lawsuit on unpaid invoices has also probably never had its contracts or invoices scrutinized by a judge.  An experienced creditor’s attorney can review your unpaid bills and anticipate any problem areas.  It is always important to have an attorney represent you, especially the first time your contract, invoices or credit applications are examined in court.

• Clients and customers do not like to be collected against.  How you handle your collection efforts establishes a part of your reputation. You want to take appropriate steps when collecting debt.  Again, a qualified creditor’s attorney can assist you with the approach to take or in handling your collections altogether.

If you need assistance with your collection matters, contact Windtberg & Zdancewicz to schedule an appointment today.  We have years of experience in representing creditors just like you.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of creditors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

 

If you have customers or borrowers who are not making timely payments, it is time to take action!  Below are a few tips for minimizing late payments and developing your own radar for anticipating when an account is headed for collections:

• Be direct.  It is important to stay calm when dealing with a debtor.  Keep your contact short and specific.  Try to keep your conversations related to the business at hand and do not let them get personal.
• Do not harass.  Let the debtor know you are serious about being paid, but do not harass them.
• Create solutions.  If the debtor has genuine financial problems, create a manageable payment schedule, offer a one-time deep discount, or other creative ways for you to get paid.
• Send demand letters.  It is important to make a written demand for payment, but you should also follow-up the initial demand with a series of letters that increase in intensity.  The letters can also be used as evidence if you file a collection lawsuit.
• Hire an attorney.  A demand letter from a law firm immediately tells the debtor you are serious about getting paid.  Many debtors will be more cooperative once an attorney is involved.  The possibility of being liable for attorney’s fees in addition to the debt can be a strong motivator.

If you need assistance with collecting delinquent accounts, contact the attorneys at Windtberg & Zdancewicz, PLC.  We have the experience and knowledge it takes to help you get paid!

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.

 

When a customer or borrower files a Chapter 7 bankruptcy case, the debtor must file a Statement of Intent, which informs the court and the creditors what you intend to do with your secured debt.  This means the debtor will indicate if he intends to surrender the collateral or keep it and pay for it.

One option that secured creditors have is to ask the debtor to execute a reaffirmation agreement.  A reaffirmation agreement is a contract between the debtor and the lender whereby the debtor agrees to pay all (or a portion) of the money owed, despite the bankruptcy filing.  Depending on the circumstances, a creditor may submit a reaffirmation agreement with the same terms as the original contract, or the terms may be altered.  By signing a reaffirmation agreement, the creditor agrees that the debtor can keep the collateral as long as the debtor makes the required payments.

A debtor may be reluctant to sign a reaffirmation agreement because it removes the applicable debt from the bankruptcy.  In other words, the debtor’s personal liability for the debt remains intact at the conclusion of the bankruptcy case.  This is precisely why a creditor wants a debtor to sign such an agreement.

If you are interested in learning more about reaffirmation agreements or creditor’s rights in bankruptcy cases, please contact Windtberg & Zdancewicz today.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation.  We handle many types of business disputes on behalf of creditors. If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.