If you own a business on Long Island, there will inevitably come a time when you need to collect on a debt — or defend against a creditor claim. Whether you’re owed money or owe it, a debtor/creditor dispute can have a significant impact on your cash flow, operations, and reputation. In such cases, an attorney can be a critical asset to protect your interests and preserve your business relationships.
What are Debtor and Creditor Claims?
Debtor and creditor claims involve situations where one party owes money to another. The legal action taken depends upon the nature of the claim and whether the interest is secured by collateral. While debtors may dispute that a debt exists or challenge the amount of the debt, creditors seek to ensure the debt is paid.
How Can an Attorney Help with Debtor Claims?
In business, financial debts commonly arise in connection with loans, invoices for goods or services, and credit purchases. Having bad debt can adversely affect a company’s financial health, strain cash flow, and make the company less attractive to potential investors. An attorney can be instrumental in helping a debtor dispute an unjust debt or reduce the amount they owe. They can assess the claim, provide you with the legal guidance you need, and negotiate a settlement.
A business attorney can help you explore debt resolution options. They can also handle the following on your behalf:
- Pursuing lawsuits and collections actions
- Negotiating debt settlement or a payment plan with creditors
- Communicating with creditors
- Negotiating a reduction of the interest rate
- Structuring an agreement that will ensure your business remains operational
- Advising on business restructuring
If a judgment is entered against you, an attorney can help protect your assets and ensure that debt collectors are not engaging in unfair practices.
How Can an Attorney Assist with Creditor Claims?
When businesses are owed debts or payments are delayed, it can impact relationships with suppliers, reduce the ability to secure funding, disrupt cash flow, and hinder growth. If your business has not been repaid a debt, you may be entitled to pursue a creditor claim. In addition to helping you recover your unpaid invoices, an experienced business attorney can provide crucial assistance to ensure you remain compliant with the law.
By having skillful representation, you can also increase the chances that the debt will be repaid without going to court. An attorney can advise whether alternative dispute resolution is a viable option.
A diligent business attorney can also assist with a creditor claim by:
- Helping you understand your rights
- Drafting and reviewing contracts to ensure they are enforceable
- Sending demand letters
- Filing a lawsuit to recover the funds owed
- Obtaining a judgment
- Handling negotiations with a focus on preserving business relationships
- Perfecting liens
- Mitigating the risk of future disputes
Once you have received a judgment, an attorney can use various tools to help you collect. For instance, they may be able to serve an information subpoena, obtain a restraining notice, or secure a court order to garnish the debtor’s wages. Other options that may be available to ensure a judgment is paid can include obtaining a wage garnishment or attachment order.
Contact an Experienced Long Island Business Attorney
If you’re facing a debtor/creditor claim, a knowledgeable business attorney can protect your financial interests and safeguard your legal rights. Offering dedicated counsel to business owners across Long Island, Barnes & Barnes, P.C. provides representation for a wide range of commercial matters. Contact us at (516) 673-0674 to schedule a consultation.
