Be Nice, Don’t Sue: Why it pays to be nice in Pennsylvania Debt Collection
The goal of all PA debt collection is to get paid. This article will tell you why sometimes it makes more sense to avoid litigation to actually collect monies owed.
Reason #1. Let the debtor fund the the lawsuit against them
In PA Debt Collection, you want to have your judgment recorded first. If there are multiple judgments against a debtor, the one who recorded their judgment first, is the first Plaintiff to get paid. Sometimes though, (and just sometimes), it makes financial sense to avoid litigation if possible. Why? Because lawsuits cost money. There are filing fees, service fees, attorney fees, possibly deposition costs, judgment costs, and execution costs. PA debt collection cases can be expensive, and you don’t want to throw good money after bad money. If you can obtain payments early by working with debtors, you are in essence allowing the debtors to fund their own lawsuit against them or pay these costs in advance. It can make sense to work with debtors to get some money out of them. Let the debtors make 1 or 2 payments to help fund the lawsuit you may need to file. Also, by getting payments early on, you can identify banking information, which can be extremely useful later in the execution process. Having copies of their cancelled checks can allow you to freeze their bank account later. Keep copies of any and all payments. Typically, I would only agree to payments if the entire debt will be satisfied in 6 to 12 months OR LESS, depending upon the amount owed. I am not advocating for waiting to file, but sometimes you need to give the debtor a chance.
Reason #2. Pennsylvania is not the easiest state to collect in.
Pennsylvania is not the easiest state to collect in. Debtors have a huge advantage when it comes to PA debt collection. The primary reasons are that “Marital Property” can be exempt, and Plaintiffs are not allowed to garnish wages (with a few minor exceptions i.e. landlord/tenant). Marital property refers to any property or asset that either the husband or the wife own. This means that you cannot execute against marital assets, unless you have a judgment against both the husband and the wife. Next, PA debt collection laws do not allow garnishment of wages for most private judgment debt. This means that it can be difficult to collect off of individuals, even if they are employed. Instead, Pennsylvania debt collection requires that you rely heavily on each county’s Sheriff’s Office for either sheriff sale of personal property or real estate. This process can, once again be expensive, take time, and not provide any assurances of payment.
Reason #3. If Litigation is necessary, still be NICE!
If kindness does not produce payment, then you need to file suit as soon as possible. But while many look at litigation as an adversarial proceeding, I believe PA debt Collection can be a little different. There is the opportunity of having a nice relationship while being adversarial. We both want the same thing, for this lawsuit to be over. You can be nice and still be very aggressive with your litigation. Once your lawsuit is filed, apply as much legal pressure as possible, including applicable discovery, depositions, and motions for summary judgment. Act as swiftly as possible to place legal pressure on the debtors. It is a mistake to make certain PA debt collection matters personal because anger and hostility in litigation can close payment options in the future. The goal is to get paid. Debt collection is about recovering money owed as fast as possible. While forceful litigation may be necessary, keeping all options open is essential to increasing your odds of actual collection. Making it personal closes doors and gives the debtors another reason to make sure your debt does not get paid. Usually these debtors have multiple debts. If you remain nice, even through hostile litigation, you should be paid faster and collect more than the typical lawyer who sends a nasty letter. Of course, there are always exceptions; but when it comes to PA debt collection, BE NICE!
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Thank you, Noah Paul Fardo Managing Partner
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