Commercial Collections involve retrieving past-due debts and receivables owed to a business by another business or an individual with a business related debt. In contrast, consumer collections involve debts owed by individuals who incurred the debt for personal, family, or household purposes.

In Arkansas, business owners are at a disadvantage during commercial collections. The Arkansas statute of limitations permits only two years to collect on medical debts, three years to collect on verbal contracts, and five years to collect on written contracts. Judgments are good for 10 years after being passed. Upon expiration, you will no longer be able to collect on the debt.

A collections agency contacts a debtor through a series of dunning letters and phone calls. They run a high-volume business which means that their approach is handled the same way every time regardless of the debt or debtor’s circumstances.

An attorney uses legal process and court mandate to collect the debt, and can tailor their legal strategy on a case-by-case basis. Since an attorney has the weight of law behind their collections attempts, the process is often resolved faster than if a debtor is left to their own devices.

Once a claim is accepted for collections, the first step is investigation – into the debtor and its assets and liabilities. This can be accomplished through public records and private data sources available to us, including subscription only databases to which we belong. Depending on the results of the investigation, we may either send a final letter or call, or immediately file suit – especially if previous instances of debt default come to light.

Next, litigation is filed to collect past-due receivables with the goal of obtaining a judgment or settlement. Most commercial collections cases are not subject to contested litigation because there is no defensible objection. Summary judgment (judgment given prior to trial) is often passed based on the investigatory documents and a supporting affidavit. In cases with chronic default, we may seek a pre-judgment remedy against the debtor, such as an attachment against their assets or an injunction to preserve the status-quo or prevent fraudulent transfers of assets. This ensures that a debtor cannot hide or wrap up assets that could be used to pay you back.

After judgment is passed, the final stage is judgment enforcement. This is when we will enforce the judgment against the assets of the debtor and turn it into cash using a variety of enforcement tools permissible by law.