Frequently Asked Question’s

McHughes Law Firm, PLLC provides helpful and convenient answers to the questions our team receives the most.


We understand that questions are common with the debt collection process. To help clients and consumers, we have gathered the answers to our most frequently asked questions. However, if you are unable to find the answer to your question here, we encourage you to call our firm at 501-376-9131. Our team will be happy to answer your questions.

What is the difference between Commercial and Consumer Debt Collection?2021-06-11T19:47:56+00:00

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.

Why Do I Need a Collections Attorney as Opposed to a Collections Agency?2021-06-23T19:44:20+00:00

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.

What does debt collection look like?2021-06-11T19:49:28+00:00

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.

What Judgment Enforcement Tools are Available to Collections Attorneys?2021-06-23T19:46:29+00:00

In Arkansas, a collections attorney can enforce judgment in a variety of ways. Any seized physical property can then be liquidated into cash through public auction. We can also seize the debtor’s bank accounts through account levies. Depending on the nature of your debtors’ business assets and debts, other devices may be employed.

What is the likelihood that my collections claim will be recovered?2021-06-11T19:50:25+00:00

Success is dependent on several factors. The age of the receivable as well as its size and its nature of use factor into the probability of seeing return. Whether the debtor is still in business, whether the debtor has unencumbered assets, whether or not the debtor is a defendant in other litigation, and whether there are prior unsatisfied judgments against the debtor are also important considerations.

The more information you can provide us with regarding the debtor – where they bank, their primary customers, clients, or shareholders – the better your chances of recovering your owed debt.

What Is Subrogation?2021-06-11T19:50:47+00:00

Subrogation is a legal right that is reserved by most insurance carriers. Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done in hope of recovering the amount of the claim that they paid to the insured for the loss. Subrogation issues involve the question of which part of a settlement or jury verdict must be used to repay the collateral source for payments made to the injured party. This practice is based around the idea that an injured party should not be allowed “double recovery.” The law believes that injured parties should be reimbursed for the damages they have incurred, but that they should not be allowed to profit from their loss.

Why Do I Need a Subrogation Attorney?2021-06-11T19:51:18+00:00

When an insurer is unable to recoup losses from a liable third party, its bottom line may suffer. Over time, the fiscal health of the business could be in danger. Many insurance companies and other businesses lack the time and resources to track down delinquent third parties and collect payment. Our subrogation cases typically involve representing insurance companies seeking to recover on paid losses from liable third parties. This includes lien negotiation and enforcement proceedings.

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