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Resolving Unpaid Debts

Resolving Unpaid Debts Lawyer

Resolving Unpaid Debts

REASONABLE SOLUTIONS TO NON-PAYING DEBTORS

Borrowing and lending are often big parts of business. The Firm does work for both creditor and debtor businesses that find themselves struggling to get debts paid. Since we are not a collection agency, but businesses focused law firm, we are able to look beyond the note to the business realities and look for a cooperative solution. In these situations, the best solution is often thinking reasonably and creatively. No business is the same, and understand the financial pressure that has led to problems paying a debt and the economic reality is the best way to find a solution.

PRESSURE CALIBRATED TO GET YOU PAID

Mindlessly turning an unpaid debt into a judgment and then starting collection work can quickly push a debtor into dissolution or bankruptcy. That is why the Firm believes in cooperation wherever possible. That does not always mean coddling the debtor business, however. A business in distressed may not have bandwidth to carefully work on all of its problems. Sometimes, it is important to apply carefully calibrated pressure to remind the debtor that this particular debt needs to be addressed. The squeaky wheel gets the grease.

FINDING WAYS TO GIVE AND TAKE

Sometimes, all a debtor needs is some breathing room to allow it to manage whatever crisis it is facing so that it can return to servicing the debt. Deferments can help get construction companies through slow seasons, for example. But, before doing this, a business creditor should think carefully about what it is getting in return. Giving a business debtor something for nothing may make you vulnerable to being exploited if the debtor is acting in bad faith. Rather, the Firm believes in finding a way where any such workout also is in the creditor’s best interest.

PUNCHING THROUGH BAD FAITH ASSET PROTECTION

Most business debtors are acting in good faith and, if a loan falls into default, it is because the debtor simply cannot afford it. But, sometimes, a business debtor acts in bad faith. The majority of the time, this involves improperly transferring or hiding assets or business income. Other times, the debtor simply refuses to cooperate with the creditor. This might be out of fear that the creditor will not act fairly, or self-interest. In these cases, it is critical that the creditor preserve all of its options against the debtor business. In particular, the Firm believes in acting to protect assets securing the loan and ensuring, where possible, that a bankruptcy will not eliminate the debt.
Resolving Unpaid Debts

If You Need Help Resolving Unpaid Debts, Contact Moriarty Underhill LLC Today For A Consultation!

FREQUENTLY ASKED QUESTIONS

Options include negotiating a workout or repayment plan, applying legal pressure through demand letters, filing suit to obtain a judgment, pursuing garnishments or liens once a judgment is entered, and challenging fraudulent or voidable asset transfers. The right approach depends on the debtor’s financial situation and whether they are acting in good faith.

A workout is a negotiated arrangement between a creditor and a debtor to restructure or defer repayment outside of court. It makes sense when the debtor has a genuine short-term cash problem but the underlying business is viable. Workouts avoid the cost and uncertainty of litigation and can result in a better recovery than forcing the debtor into bankruptcy.

Colorado law allows creditors to challenge improper asset transfers through voidable transaction claims — formerly called fraudulent transfer actions. If a debtor transferred assets to an insider, moved property without receiving fair value, or hid income to avoid paying creditors, a court can unwind those transfers and make the assets available to satisfy the debt.

Not necessarily. Some debts can survive bankruptcy if the creditor takes timely action. Debts arising from fraud, willful misconduct, or certain fiduciary breaches may be non-dischargeable. It is important for a creditor to file a proof of claim in the bankruptcy case and, where grounds exist, object to the discharge of the specific debt before the applicable deadlines.

It depends on the size of the debt, the debtor’s ability to pay, and whether a judgment can realistically be collected. A court judgment is only as valuable as the debtor’s available assets. Before filing suit, it is worth assessing whether the debtor has attachable assets, real property, receivables, or other means of satisfying a judgment — and whether the cost of litigation is proportionate to the likely recovery.