The commencement of a Bankruptcy creates what is called an "Automatic Stay". The Stay prohibits Creditors from taking actions that the Creditor would normally take when trying to enforce its rights, such as calling the Debtor, sending the Debtor demand letters, attempting to repossess collateral, using an ignition interrupter or GPS on a financed motor vehicle or suing the Debtor. All of these actions are among those that are prohibited by the Automatic Stay. Instead, certain Creditors may take the opportunity to ask the Bankruptcy Court for relief from the Automatic Stay. Attorney Tom Reilly has represented both commercial and consumer Creditors and frequently seeks relief form the Automatic Stay.
Whether you are a small business sending out invoices, a company leasing equipment, or a bank lending money, the first step in assuring payment is good, clear, concise documentation supporting your extension of credit.
Civil Courts also provide remedies to recover possession of collateral, such as in Installment Sale contracts under the Motor Vehicle Installment Finance Act or other third party lending and loans where collateral is taken. Pennsylvania Rules of Civil Procedure provides for an action in Replevin, which results in the entry of a judgment for possession of the collateral that can be enforced by the Sheriff actually taking possession of the property. There is also a more immediate remedy under the Replevin rules, which would entitle the Creditor, upon posting of a Bond and demonstrating a probable likelihood of its claim for possession, the Court may grant a Writ of Seizure allowing the Sheriff to take possession of the property before a final judgment is entered. The Creditor could then…
The value of property securing a debt, Collateral Value, is a very significant issue in determining how a Creditor will be treated in Bankruptcy Court. Too much value above the debt and you may be considered "adequately protected" and will be prevented for getting relief from the Automatic Stay. Too little value and you may be deemed "unsecured" for a significant amount of the debt. Collateral Value is generally determined by an Appraisal. In certain cases, the Value can be based on a Market Report.
Although, Courts do not exist to enforce debts, they are a method of resolving disputes. A Civil Action commenced on the basis of a debt or Foreclosure takes the course of any other lawsuit. Proceeding through the Court process is the necessary first step in obtaining a Judgment. In addition to Enforcement remedies, Judgments also create liens on the Defendant’s interest in real property. Thus, a simple suit to Judgment may create an involuntary way to “secure” the debt. Attorney Tom Reilly has 40 years of experience in a wide range of Federal, State and Local courts to provide the best resolution.
In commercial obligations in Pennsylvania, a Confession of Judgment clause, or Cognovit clause, may be employed in a document that would entitle the Creditor to simply go to Court and obtain a judgment immediately without pursuing the normal court processes. Although expeditious, the Defendant still can attempt to defend against the Confessed Judgment but the procedure is strict and limited. A Creditor's compliance with Pennsylvania Rules of Civil Procedure is essential in making certain that the Creditor both executes its remedies effectively and avoids the potential pitfalls of violating a customer’s Constitutional rights by employing civil process when it is not appropriate. Attorney Tom Reilly, as a member of the Rules Committee, participated in the drafting of the current…
In addition to Creditor's remedies that the Rules of Civil Procedure and Statutes provide, a court's Equitable power provides other ways that debts may be collected or property recovered. A Constructive Trust is an Equitable remedy created when a Court requires a person holding property to actually keep it in "Trust" for another purpose and must act as a "Trustee", thus holding the property available until a final determination of a Creditor's claim.
What terms should you include in your Purchase Orders, Invoices and other correspondence? How do you identify your customers when creating an account? Can you charge a late charge? Is there a way to secure your debt? Which Court's jurisdiction should you use to govern any disputes arising from your documents? These are a few of the questions that can be answered in a discussion with Attorney Tom Reilly. They are the foundation of the ultimate collection of a debt and must be fully considered before you lend any funds.
Attorney Tom Reilly is experienced in drafting and preparing all documentation used in Credit Programs and Personal Property Leasing Programs. Setting up a program to extend Credit to your customers must be carefully considered. Which laws or regulations are you required to comply with? How do you price the credit you are planning to extend? Do the charges comply with applicable interest rate laws? What are you risking in doing it one way or another? How technical or simple do your documents have to be to be enforceable? Attorney Tom Reilly encounters these issues daily in his practice and can assist you in developing the best program for you and your business. His knowledge and experience extends to enforcing Leasing documents that…
If you are a Creditor with collateral, you are entitled to receive Adequate Protection so the value of your collateral does not diminish by the Debtor’s continued use during a proceeding. If Adequate Protection is not offered, a Creditor can request the court to lift the Automatic Stay to allow the Creditor to recover its collateral. Both Chapter 13 and Chapter 11 Bankruptcy involve Plans to rehabilitate a Debtor’s financial circumstances. Chapter 13 pertains to “wage earners” and usually intends to cure mortgage arrearages. The main Creditor tools are filing Motions for Relief from Stay, Objections to the proposed Plans and Motions to Dismiss or Convert, based on lack of feasibility and failure to comply with statutory requirements. A Chapter 11 Bankruptcy filing is more…
After a judgment is acquired in a Court proceeding, a Creditor can undertake “discovery” to discover whether the Defendant has assets from which the judgment can be paid. Discovery can be in the form of written questions about the Defendant’s assets that the Defendant must answer (Interrogatories) or by taking Depositions of anyone with knowledge of Defendant's assets to ask those questions in person.
For 40 years, Attorney Tom Reilly has drafted and modified documents for a wide variety of Creditor relationships. Whether revising a standard form or creating a one of a kind document, Tom Reilly has the experience to provide the document you require for your situation.
If a Creditor has obtained a Judgment against the entity that owes money, there are a variety of ways the Judgment can be enforced. A Sheriff can use the power of the Court to execute on the Judgment forcing payment by seizing and selling the assets of the Defendant. This can include real estate or personal property such as a car, art, furniture, shares of stock in companies and member's interests in Limited Liability Companies. Certain items are exempt from the execution process. The Rules are complex and frequently involve in different rules and procedures specific to each Sheriff's Office. Attorney Tom Reilly knows the Rules and the questions to ask to expeditiously enforce judgments regardless of jurisdiction.
Drawing on the experience of representing Creditors and Businesses in preparing documentation and taking action in Civil Courts and in Bankruptcy Court, Attorney Tom Reilly is able to provide additional services. Expert Witness Attorney Tom Reilly has been called upon to prepare Opinion evidence to be presented in court through his testimony as an Expert in areas of his concentration. These include the reasonableness of action taken to enforce a debt; the reasonableness of the attorney's fees incurred in the enforcement of the debt; the quantum meruit value of the attorney's services rendered in enforcing a debt. This is significant because Creditors' documents often entitle them to recover "reasonable attorneys fees". Because the attorneys' fees actually incurred cannot be determined…
Fair Debt Collection Practices Act This Act provides requirements for attorneys seeking to collect debts on behalf of clients for personal, family or household purposes. The Act sets forth specific guideline on the frequency and type of the attorney's efforts in such cases. The Act provides statutory damages for violations and attorneys fees and can be a trap for the unwary, and sometimes the wary, practitioner. Avoiding claims asserted under the Fair Debt Collection Practices Act and resolving such claims expeditiously is generally the better choice.
This Federal Law imposes restrictions and duties on Debt Collectors which includes attorneys. The Fair Credit Extension Uniformity Act, in addition to governing the conduct of Debt Collectors pertains to Creditor's conduct in collecting their own debts. Whether you are dealing with how to comply or fending off complaints asserting lack of compliance with this law, Attorney Thomas E. Reilly can assist you.
This Rule is the reason most consumer Purchase Money contracts contain a certain Notice that makes the Lender and its Assignees aware that they are subject to claims that the Debtor may have against the party with whom they first dealt. If a claim is asserted pursuant to the Rule, the Creditor must be concerned with not only defending the claim, but also with its potential rights against its assignor. Attorney Tom Reilly has handled many of these scenarios requiring timely and proper pleading, proper joinder of parties, demands for defense and indemnification.These cases involve the interplay of the Uniform Commercial Code, other regulations and statutory provisions including the Unfair Trade Practices and Consumer Protection Law, Motor Vehicle Installment Sales Finance Act, and the…
A Creditor might find that the assets the Defendant once owned are now titled in another’s name or encumbered by liens favoring other parties. This may fall within the theme of Defendant's “Asset Protection Planning.” While certain strategies to protect from liability are valid, others may fall within those that are considered fraudulent as to Creditors. When the statutory elements of a "Fraudulent Transfer" are established, a Court can set those "transfers" aside and allow the Creditor to access those assets to satisfy its judgment. These remedies can be employed in State, Federal and Bankruptcy courts.
When a third party owes a debt to Debtor, such as a bank or employer, a Creditor's judgment can be enforced in a Garnishment proceeding, where a third party (bank or employers) is compelled to pay Debtor's funds directly to the Creditor to satisfy the debt. If Debtor has personal property of value sufficient to satisfy the debt to Creditor, a Sheriff can be directed to Levy upon the goods, taking them from Debtor to be sold, with the proceeds to be distributed to Creditor in fulfillment of its debt. .
For a Creditor, bankruptcy is another step along the way to the ultimate resolution of the debt.
Acting on the theory that the best defense is a good offense, customers or obligors often commence suit against the Creditor.
A legal action in Mortgage Foreclosure concludes with a Sheriff Sale of real property. It is set up in the same manner as a sale of levied property seized to satisfy a judgment. The distinguishing difference is the lien priority and which liens are removed by the Sale. Negotiating the Rules, Regulations and process that govern the Creditor's exercise of the Mortgage Foreclosure remedy is essential to acquiring good Title to the real estate that is the subject of the Foreclosure.
The Bankruptcy Code exempts certain kinds of debts from Discharge because of the way the debt arose. Fraud, false financial statements, embezzlement, larceny, defalcation of a fiduciary and other reasons may work in a Creditor’s favor to preserve the debt from discharge The debt will exist and be enforceable after the Debtor receives a discharge for other debts. To obtain a Decree where the debt is not discharged requires an Adversary Proceeding which is essentially a civil law suit in the Bankruptcy Court. The Creditor generally must prove both the debt and the factors that render it Non-Dischargeable. In his 40 years of experience, Attorney Tom Reilly has successfully handled a wide variety of proceedings exempting debts from Discharge.
This law provides Consumers with a vehicle to assert claims against Creditors that arise from Consumer transactions. The Law enables the Consumer to act as a "Private Attorney General" with the incentive that the attorneys fees incurred by the Consumer can be shifted to and imposed on the Creditor. Claims arising from debt collection, automobile finance, Real Estate Seller Disclosure responsibilities and other laws can be asserted by the Consumer. With the potential for incurring liability for the Consumer's attorney fees as well as the Creditor's attorney fees, an early evaluation of the validity the Claim, establishing a strategy for defending the Claim and then asserting an effective Defense is essential. Attorney Tom Reilly has successfully defended Creditors against such…
When a Debtor either pursues Bankruptcy or is placed in Bankruptcy, filing a Proof of Claim is usually required to place on the Court Record the amount and character of the Creditor's claim against the Debtor. While many Creditors file Proofs of Claim without an attorney, a timely, accurate and complete Proof of Claim is essential to protecting the Creditor's rights against the Debtor and the Debtor's assets. In Chapter 13 proceedings, the Proof of Claim will also include the arrears that a mortgage in Debtor's Plan intends to cure and the amounts and elements the future mortgage payments. Because the Chapter 13 is an ongoing process, changes in the regular payment because of variable rates or escrow recalculations, require amended Proofs of Claim and Notices of payment changes.
Receivership is a remedy used to gain control over collateral assets when a business or individuals financial circumstances are declining. In some instances, Creditor's documents, such as a Mortgage, authorize the appointment of a Receiver to take control of and dispose of collateral for the Creditor's benefit. In other circumstances, the remedy is available under the Court's Equity powers. The advantage of a Receivership is that the initiating Creditor often dictates the terms the Receivership with Court supervision. Attorney Tom Reilly can discuss with you whether this remedy would provide an effective for means for resolving a relationship with Debtor and can take the necessary action to obtain the Receivership relief.
The Civil Courts offer Creditors a variety of remedies to enforce collection when a customer fails to pay. It is important to remember that the Courts do not exist to enforce debts, but are a method of resolving disputes.
Pennsylvania has an Interest Rate law that sets the interest rates that a Creditor may charge, setting 6% as the “Legal Rate.” There are a variety of other rates based on various laws both State and Federal as well as exemptions from rate restrictions that can come into play. Fixing the correct rate and defending against a contention that the Interest Rate charged is “usurious” requires a knowledge both of State and Federal law and regulations. It requires the ability to explain the difference between the "Disclosed Annual Percentage Rate" and the "Interest Rate" or the basis for the 1.5% month rate found on many invoices. Attorney Tom Reilly has successfully addressed these issues in litigation throughout his career. He has assisted Creditors in establishing the necessary…