Greenbaum Law Group, LLP

Greenbaum Law Group LLP is a commercial collection law firm specializing in Debt Collection and Enforcement of Judgement with offices in California and New York.

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Why We Don’t Send Demand Letters

In this week’s video, Parris D. Trimble, Esq. discusses why Greenbaum Law Group, LLP does not send demand letters for commercial debt collections, filing the lawsuit instead.

Full Transcript

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm.

You might have seen some of my other videos where I provide tips on how to write a demand letter and how to make the collection phone call. In those videos, I state that we don’t do that here at Greenbaum Law Group, now why is that? We have found that in general, that phone calls and demand letters aren’t that effective when it comes to commercial debt.

Let’s say that we had a hundred commercial debt cases, and we made phone calls and sent them add letters to all 100, maybe 5 to 10 would settle. Those are really great odds. Let’s think about this for a minute. Let’s say that you receive a demand letter in the mail, what do you typically do? Most people here in California know at least three attorneys on a first-name basis, in fact, you may even have an attorney in their family or in your close network of friends.

So you call your attorney friend and say hey I received this demand letter, can you write a response? Typically most of the time they will. Perhaps they’ll say oh we didn’t receive the invoices or oh the work wasn’t done properly. Again this is just dragging on the process and not getting you any closer to getting paid.

Now, let’s look at another scenario. Instead of sending a demand letter we file a lawsuit, and the lawsuit is personally served on the debtor. So now the debtor picks up the phone and calls his attorney friend and the attorney is much less willing to jump in and represent the party in the action, especially without being paid. We find that collection letters and phone calls simply aren’t that effective, and we jump straight into filing a lawsuit.

Originally published on May 7, 2021 at https://collectionlaw.com.

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Consumer Debt vs. Commercial Debt, What’s the Difference?

In this YouTube video, Parris Trimble breaks down the differences between Consumer Debt and Commercial Debt and gives us specific examples of each.

Full Transcript:

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm. Here at Greenbaum Law Group, we only take cases that involve commercial debt and do not take cases that involve consumer debt. You may be wondering what is the difference between commercial and consumer debt. In today’s video, I will give you a brief very general overview of the two types of debt.

Let’s start with consumer debt, this is something we are all too familiar with. Consumer debt is sometimes called retail debt, and it is debt that is incurred by an individual in the course of their daily living. Consumer Debt is the money you owe as a result of purchases that you made for you or your family members. Let’s look at a couple of examples. You go to Macy’s to buy new clothes for your infant and charge it to your Macy’s card, that’s consumer debt. Or perhaps you have termites and you tent your house, money owed to the Exterminator- that’s consumer debt.

Now, let’s look at commercial debt. Commercial debt is typically debt that’s incurred between businesses. Now, it’s even the case if the business is a sole proprietorship or partnership. An example of a commercial debt could be unpaid invoices for a bulk supply of sweatshirts to a retail shop or say I want to start a new pizza parlor and I go out and get a small business loan to start the pizza parlor, the business loan is commercial debt.

Now, let’s look at an item and see how the item could be a commercial debt or a consumer debt. The example I’m going to use is a dining table. If I go out tonight and buy a new dining table for my kitchen at home and put it on my Visa card, that’s consumer debt. However, let’s say I want 20 new dining tables for my pizza parlor, the 20 dining tables for my business is business debt and that is considered a commercial debt.

Originally published at https://collectionlaw.com on April 23, 2021.

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How to Write a Demand Letter – Part 2

Recently Parris Trimble, Esq. of Greenbaum Law Group gave a two part video series on how to write your own demand letter. She covers topics ranging from reminding your debtor of the consequences of not paying, to keeping bad content out of your letter and not insulting your debtor.

Here is the full transcript of the video:

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm. Today is my second video wherein I share with you some tips on how to write your own demand letter.

The first tip for today is to remind the debtor of the consequences, and by this I want you to go back and look at your contract or your credit application and look for an attorney’s fees clause or an attorney’s fees provision. These documents often contain an attorney’s fees provision wherein the prevailing party has to pay for the other side’s attorneys fees. If you have an attorney’s fees provision in your contract or your credit application, remind your debtor of this in the demand letter, they may be more likely to pay.

Also, some content simply does not belong in a demand letter. Content such as whining or reminding the debtor how many times you called or emailed and they didn’t respond often doesn’t get you anywhere. The debtors tend to get angry and use it as a reason not to pay, so try to avoid that. And similarly, do not insult the debtor. That doesn’t get you any closer to payment. And don’t call for a compromise. As soon as you suggest that you’ll take less than the full amount owed, it becomes a negotiation. Let the debtor come to you first with a compromise but you don’t offer it first.

Finally, if your demand letter doesn’t work don’t wait. Bad debt is not like fine wine it does not get better with age.

Originally published at https://collectionlaw.com on January 15, 2021.

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How to Write a Demand Letter – Part 1

Recently Parris Trimble, Esq. of Greenbaum Law Group gave a two part video series on how to write your own demand letter. She covers topics ranging from knowing who to send the letter to, to keeping it short & simple and more.

Read the Full Transcript Below:

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm. Today is the first of a two-part video where I’m going to share with you some tips on how to write your own demand letter.

The first tip for today is to know who to send the letter to, and by that I mean we often send it to the accounts payable person but the accounts payable person doesn’t always have the authority to write the check. Send it to the CEO or perhaps if the company has an in-house counsel, send it to the in-house Counsel as well. You wanted to send it to as many people as possible. We have this saying around the office that we always want to get stuff off our desk. So if you send it, it’s on everyone’s desk, and if you have something on your desk you look at it and say how do I get rid of this & you give it to the person who can handle it. That’s the goal there. The more persistent you are the more likely you are to get noticed.

The second principle is the kiss principle, keep it short and simple, and by that simply say “we have not received payment for X please make payment to…” This is really short with no feelings and no emotions. Don’t let them have you play the go fetch game. How many times have you heard “Oh we never received the invoice…” send a copy of the unpaid invoice with the demand letter to cut out that extra step.

And finally, don’t give extended payment terms. Shift the burden over to them. For example, you can say “If payment is not received by X date” maybe 5 or 10 days away, “we understand this as your invitation to…” then you can either say “begin collection proceedings” or “to suspend your account”

Next week, we will cover more of this topic in our post “How to Write a Demand Letter – Part 2.”

Originally published at https://collectionlaw.com on January 15, 2021.

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How to Write Your Own Collection Demand Letter Infographic

Originally published at https://collectionlaw.com/ on September 17, 2020.

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Sister State Judgement Collection in California

Enforce your money judgment entered in any state against your debtor in California. Judgments from all American states are enforceable and collectible in California as a Sister State Judgment.

The Constitution requires all states to honor the judgments of each other and to allow them to be enforced when you have a judgment against a California resident or business or someone who has assets in California we take legal collection action.

The procedures are generally simple and fast. You don’t have to prove your case again with a properly certified copy of your judgment from another state we’ll turn it into a California judgment anywhere in California and will fight to get your money fast. Greenbaum Law Group offer sister State judgment enforcement legal services in California on either contingent or hourly fees.

At www.sisterstatejudgments.com, you’ll find answers to frequently asked questions and our fees are clearly shown. This video is a great source of information on starting your Sister State Judgment collection.

Originally published at https://collectionlaw.com/ on August 7, 2020.

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Debt Collection in California

Collect bad debt in California. Bad debts are not unusual, most businesses experience some bad debt. Take action. Don’t just hope things will change. Send your own demand letters and make your own collection calls.

When those don’t work, hire a collection attorney to sue now, not after more of the same. If your collection calls and demand letters failed engage us as your collection attorney to begin your collection suit quickly. Bad debts don’t age well. If you don’t hire a collection attorney and the other creditors do, your debt won’t ever get paid. collection agencies don’t sue, they just make more calls and send more letters.

The courts aren’t free. There are court filing and process server costs. Anyone who promises to collect without any court costs are just a come-on. Consider the benefits of either contingent fees or hourly fees for your collection. We’ll send you information on both.

Originally published at https://www.collectionlaw.com on August 13, 2020.

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10 Tips For Collection Calls Infographic

Originally published at https://collectionlaw.wordpress.com/ on June 22, 2020.

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10 TIPS FOR COLLECTION CALLS

1. Know who to call

Determine the name and extension of the A/P person once and keep it. Get the email also. If repetitive calls are necessary, be nice.

2. Know how soon

You teach your payment terms. If you call when a bill is 30 days late, you just taught that there are 30 extra days in the payment cycle. Call 5 days after a payment is due.

3. Know when

Afternoon calls get deferred to the next day. Be on the short list for today’s action.

4. Two Views on Content

KISS, Keep it short and simple. No blame! No insults! No emotions! “I’m calling because your account is overdue. Will you pay this now?

Chatty. Listen without blaming and keep the conversation going. Discover the facts or build rapport or become less threatening.

5. Be Prepared to Respond

Anticipate the usual excuses. Have the responses ready. For example, if told they didn’t receive invoices or billings, have pdf’s ready to email immediately while you are on the phone. Have your statements and A/R balance report handy for past payment application responses.

6. Payment Alternatives

Send an email with direct deposit and wire transfer instructions to an account in one of the big chain banks. Describe payment by going to a branch of your bank to deposit. Do you take credit cards? PayPal? Venmo? Zelle?

7. Pick Up a Check

FedEx, UPS and others will pick up, usually same day if called early. If you are told they have a check for you, ask if you can have (FedEx) pick it up that day. If yes, call for a pick up. Eat the cost to get the money if the payment is big enough.

8. Speak Through a Smile

Few people like collection calls but most people like to talk to friends. They smile when talking to friends. Treat each debtor as your friend and your attitude will come through your voice. People pay more attention to friends.

9. Keep a Log

Know when you called, sent letters, what was said, who you talked to and what was discussed. This may not be important now but it could be very important in the future.

10. Make Every Call a Success

You won’t collect on every call so don’t set yourself up for feelings of failure. End each call with an assessment of what you gained from making the call. You can almost always find something positive, even if it is just knowing you must move to the next level.

Originally published at https://collectionlaw.wordpress.com/ on June 22, 2020.

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Measuring ADO for Creditors

Most business-to-business debt is monitored and collected on a monthly billing cycle.  Most vendors send invoices with payment terms detail such as “net 30”,  a specific date or EOM (end of month).

Sending Out Billing

Generally, open accounts are billed at the end of a month for the monthly balance owing.  Creditors teach their customers that they will wait 30 days from statement to get paid. Some Creditors bill on an invoice basis but send an EOM Statement of Account.  The terms on the Invoice contradict the EOM statement.

ADO (average days outstanding) is a key metric used in assessing cash flow and in collection of accounts receivables.  But from when do you start ADO?  From invoice?  From EOM billing?   It goes without saying that the faster your company gets paid after the sale is shipped, the better your cash flow.  A big problem is that frequently the accounting department, the sales department and the finance department define ADO differently.  Best Practices requires that everyone in the company work from the same definition of ADO.  

But the decision on how rapidly an invoice or bill is sent isn’t always easy. Who makes the decision varies from company to company.  It seems frequently dictated by the technology being used for billing.  Or the task is done by an Account Receivable Department that wants a specific date so they can balance workflow or human resources.

If the finance department wants an ADO from date of invoice, the technology may resist specific billing in favor of account wide billing.  The “System” may not be  “programmed” for promptest payment.  And if “The System” is programmed to measure ADO from the EOM billing, that may add from 1 to 29 extra days to the ADO.

Critical Event Billing

Critical event billing is superior for sales that aren’t repetitive.  A billing is generated when a big sale is made.  That becomes day one.  

Start with just the first step.  Conduct a company-wide survey of how each department views the money that is owed. Did it hit their sphere of influence on the day of the order, the day of the sale, the day of the shipment, the day of the invoicing or the EOM?   If you find variance, management must make a decision and implement a policy.  Good Management about all interested parties being on the same page when using a metric of ADO as a cash management technique.

Originally published at https://collectionlaw.wordpress.com/ on September 24, 2020.

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Collecting in California from Out of State Accounts

If the debtor is out of state, should you sue here or hire a lawyer in their state?  We generally recommend that California creditors start where they are located.  The legal rules of where you can sue (subject to exceptions) usually make courts where 1) the contract was formed, or 2) where the contract was to be performed are the proper place.  Contracts are performed where the money is payable.  If you sell goods to an out of state debtor or do work for an out of state debtor, their duty is to pay you where you are, namely in California.

So basically you can sue in California.  Since most cases pay or settle,  its’ worth starting in California.   This is especially true if your debtor does any other business in California, has accounts in California who owe it money or  doesn’t want a judgment against it.  

If your debtor doesn’t pay, doesn’t respond or doesn’t acknowledge, it’s doubtful they will hire a California attorney to defend a case.  The result is that the creditor will generally win a judgment without opposition.  This avoids difficulty of trying to prove your case out of state.  You won’t have to hire a lawyer out of state.  You won’t have to send witnesses out of state, You won’t have to risk being “hometowned.

If the debtor doesn’t pay even after a Judgment is entered, the solution is transferring your California Judgment to the state where the debtor has operations or assets.   This is called a “Sister State Judgment”.   You can take your California Judgment to any of the other 50 states and it will be recognized as a judgment there.  No need to start a new case or offer proof or witnesses.

Originally published at https://collectionlaw.wordpress.com/ on October 8, 2020

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How to Write Your Own Collection Demand Letter

You don’t need a lawyer to write a good collection demand letter. Save your money and write your own collection demand letter following these recommendations.

Know Who to Send the Letter to

The accounts payable clerk doesn’t have authority to pay. Send the demand letter to the business owner, CEO or President. Always make it difficult to ignore the demand. Send by multiple means. A letter sent by mail can also be either attached to an email or incorporated into the email. A fax version can also be sent together with the email and hard copy. A text picture is another way. The more persistent you are, the more likely you’ll get noticed.

KISS. Keep it Short and Simple

“Payment of $xxx has not been received”. Don’t let them make you jump through hoops or force you to play the “go fetch” game. Attach a copy of the invoices, billings, statement of account, or other document that shows the balance.

Don’t Give Extended terms. Shift the Burden

For example, say “If the payment is not received within ___ days, we will understand that as your invitation to (alternatives) suspend your account or refer this matter for collection action”. Debtors don’t invite you to come after them often. They will deny and deflect but not invite.

Remind Your Debtor of Other Consequences

If your contract, credit application, invoices or other documents provide for prevailing party attorneys fees recovery, mention that in the letter.

Some Content Doesn’t Belong in a Collection Demand Letter.

For example, don’t whine. Recitations of how many times you called, wrote, sent information or bills, exchanged promises by email, etc. don’t move you closer to getting your money. Generally, the debtor takes it personally and adds that to a reason not to pay.

Similarly, Don’t insult.

Telling a debtor he is dishonest, broke his word, is a scoundrel, etc is counterproductive. You don’t like being insulted and neither does the debtor. Generally, an insult is a rationalization for allowing a debtor to ignore you from then on. Also don’t threaten disparagement, reports, or charges.

Don’t Offer a Compromise Quickly

As soon as you suggest you will take less than the amount owed, the debt becomes a negotiation. If there is a compromise, let the debtor suggest that. Finally, if your demand letter doesn’t work and all your phone calls have not worked, don’t wait. Bad debt is not fine wine. It doesn’t get better with age.

Originally published at https://collectionlaw.wordpress.com/on September 17, 2020