Helping lenders collect on their accounts
Banks, lenders and other Van Nuys and Encino companies that provide credit to customers know that lending is a risky business. Nevertheless, it is often a necessary risk in a largely credit-based economy. While you can never completely avoid risk in lending, you can take steps to minimize it by closely examining delinquent accounts and aggressively utilizing creditor's rights and solutions against borrowers who have the ability to pay. As credit attorneys with years of experience in all aspects of collections, debt relief and bankruptcy law, our team at the Law Offices of Michael H. Raichelson has the skills and knowledge you and your business need to manage the risks of lending and minimize your losses on delinquent accounts.
General creditor rights and collection tools
Under California law, creditors have several options for collecting on delinquent accounts. However, many cannot be exercised once a borrower files for bankruptcy. An experienced Northridge and Sherman Oaks creditors' rights attorney can help you choose which course of action is best for your business:
- Collection lawsuits —A successful collection lawsuit allows a judgment to be publicly entered against the delinquent borrower and may subject them to additional collection mechanisms through execution of that judgment.
- Wage garnishment —A creditor who has obtained a court judgment against a delinquent borrower in Woodland Hills can ask the court to garnish wages directly from his or her employer. Garnishment can be up to 25 percent of the borrower's disposable income or 30 percent of the amount by which his or her income exceeds the federal minimum wage, whichever is less.
- Foreclosure —For mortgage and home equity lenders, foreclosure can allow you to execute a lien against real property and seize it from the delinquent borrower. Foreclosure is not always a good option, however, and many creditors in Los Angeles and Ventura may find that negotiating with delinquent borrowers is often more lucrative in the long run.
- Repossession —When a borrower has pledged personal property as collateral for a delinquent loan, a lender may have the option of repossessing and selling that property to recoup its outlay. While repossession does not require a court process, it is subject to several legal limitations and requirements.
Creditor rights concerning bankruptcy
Once a borrower has filed for bankruptcy, the collections process changes drastically. Creditors do, however, still have the right to question debtors under oath, object to representations by the debtor that they believe to be inaccurate and even bring adversary lawsuits against the debtor. Additionally, in Chapter 13 proceedings, creditors have the right to object to the debtor's repayment plan if it does not adequately protect their interests. Chapter 11 creditors have even broader rights including ultimate approval authority over the debtor's reorganization plan — and the ability to submit their own plans if the debtor fails to submit or obtain approval of a plan within the required timelines.
Call today to learn how a Los Angeles County attorney can help
Lenders in Oxnard, Los Angeles and Ventura County need to approach struggling and delinquent borrowers with a practical and thoughtful strategy to maintain profitability. Our attorneys at the Law Offices of Michael H. Raichelson can provide the insight and experience you need to avoid waiving crucial creditors' rights during bankruptcy and collection proceedings. Call us today at 818-444-7770 or contact us online to learn how we can help your business.