Debt Collections

Breach of Contract and Debt Collections

A. Lewis Ward provides legal assistance with bad debt collections arising from a breach of contact and other business situations

A. Lewis Ward & Associates provides legal education and guidance to help you do everything feasible to successfully collect accounts receivable.

Breach of contract debt collections disrupt your business and it is often hard to foresee which credit accounts will be trouble. We recommend being careful to include the following on all invoices:

  • The name of the party(s) responsible for the account
  • A description of the goods or services provided
  • The per unit charge for the goods or services provided
  • The total amount due for the goods or services provided
  • The due date of the invoice

A relatively high interest rate should motivate your customers to pay as quickly as possible. However, there is a law stating that for an individual to collect interest over 10 percent, there must be a written contract, and that this contract must precede the transaction resulting in the account receivable.

In addition to forming a contract and having the customer agree to it, perfecting a security interest in the goods or products sold will improve your position. Retaining a security interest for the products/goods sometimes allows you to repossess what you’ve sold to the customer if the customer isn’t paying the debt.

The constant focus should always be on aggressively pursuing your accounts. Even if you do everything correctly, from providing detailed information on your invoices, to imposing a high interest rate, to being sure you have a security interest, if you aren’t diligent in collecting your money, the consequences can be dire. It is not impossible that the person or business owing your account receivable will go into bankruptcy; especially during these hard times. Therefore, you need to be among the first to collect your money.

A. Lewis Ward will typically file an action called a suit on sworn account or breach of contract to collect your accounts. You can recover attorney’s fees and court costs if the cost of representation is reasonable and necessary to the collection. Don’t wind up as an unsecured creditor in your customer’s bankruptcy. To eliminate as much risk as possible concerning your accounts receivable, contact A. Lewis Ward & Associates. Take action today to protect yourself and your business.