Collections 101: What do they do with old AR?
Another year has passed…..now what do you do with your old account receivables? Beers Mallers Backs & Salin, LLP expanded its areas of practice to include collections recognizing a need for our business clients to have all their legal needs provided for in one place. Beers Mallers Backs & Salin, LLP has a dedicated collection staff ready to help clients capitalize on old AR. In working with business clients, I address several issues on a daily basis. I have included some of the popular questions that are posed to our collection staff.
How do I place a lien on property?
Placing liens on properties is a common request we receive from our clients. In collection, in order to place a lien on real estate, we have to file a lawsuit and obtain a judgment. Once a judgment is obtained, a lien is automatically placed on the property for 10 years.
How long is my judgment good for?
In one word…forever. By statute, judgments are effective for 20 years. However, at the expiration of the 20 years, as long as you provide evidence that the judgment is not paid in full, the judgment continues.
What is the statute of limitations?
The statute of limitations sets a time limit within which to file your claim with the court. For Promissory Notes and contracts that are not in writing, you have 6 years from the date of default or the date of the last payment to file a lawsuit. For written contracts you have 10 years from the date of default or last payment date to file a lawsuit. For Personal Injury cases, you have 2 years from the date of injury to file a lawsuit.
Can I collect my attorney fees?
You can only collect attorney fees from a debtor if you have a signed contract with a provision providing for attorney fees to be paid in the event of default or a specific statute allows for attorney fees.
Can I collect interest?
Yes. The courts will look to your signed contract to determine what the interest rate is. If your contract does not list a specific interest rate or you do not have a signed contract, Indiana laws allow a creditor to collect 8% pre-judgment interest.
What if I don’t have a contract, can I still collect?
Yes. Most Oral contracts are enforceable in Indiana. There are exceptions that require certain contracts to be in writing. The most common one is for the sale of real estate.
As with all areas of law, there are always exceptions to each of the above questions. Please contact Beers Mallers Backs & Salin, LLP for all your collection needs and questions. If you would like more information about a specific topic in collections, please feel free to email me at kagraham@beersmallers.com.
Kara A. Graham, an attorney at Beers Mallers Backs & Salin, LLP concentrates her practice in the area of Creditor’s Rights/Collections. She represents business and individuals in many areas of collections including: commercial, medical, homeowner’s associations, retailers, and financial institutions.
