If your customers are not paying timely, or not paying at all, your business will soon be without the cash flow it needs to pay its own expenses. Every company needs to be diligent about reviewing its aging accounts receivable and taking steps to maximize their collectability. It may not appear on your ledger as a “hard” expense, but there is an expense – as well as being an unnecessary risk – to carrying too many aged accounts receivable.

The cost is most often seen as the amount of interest you pay, or discounts you cannot benefit from, to cover your expenses while waiting to be paid. You are also losing interest you could be earning on the money while in your bank and not your customers. Also, as time goes by the likelihood of collecting decreases.

In this and upcoming posts I will discuss some specifics that should considered as part of your overall account receivable management strategy. and how together your business can maintain a positive cash flow. The first thing needed is a strategy to follow.

Maintain and Follow a Written Collection Policy

Every business, large and small, needs to have policies and practices in place setting forth how its accounts receivable are managed. It is best that these policies be written. Written policies will more likely be followed by the staff. Written policies will also insure that the accounts are all handled in a consistent manner. Some of the topics that should be address are:

• Periodic review of the accounts receivable aging;
• Periodic review of customers payment frequency;
• Discount eligibility for customers; and
• Delinquent account collection practices.

These are just a few items to be considered, but far from being a complete list. Depending on your industry, or even the organization structure, there may be additional topics to address.

Attorney Phil A. Taylor has been representing creditors in their efforts to collect delinquent accounts receivable, as well as counseling them on how be proactive when possible to improve collectability of their accounts. The Taylor Law Office offers an initial 30 minute consultation at no charge or obligation to discuss how your business can benefit from being a client.

Regardless of the time of year, it is illegal and dangerous.  In fact, since 2008 it is a criminal offense for some drivers.

The offense of drag racing is governed by M.G.L. c. 90 sec. 17B , however, if you are cited for drag racing you will likely be facing additional charges of a criminal and civil nature as well.  Section17B states that “[n]o person shall operate a motor vehicle, nor shall any owner of such vehicle permit it to be operated, in a manner where the owner or operator accelerates at a high rate of speed in competition with another operator, whether or not there is an agreement to race, causing increased noise from skidding tires and amplified noise from racing engines.”  The only requirements are that the operator 1) accelerates at a high rate of speed; 2) in competition with another vehicle; 3) causing increased noise from skidding tires;  and 4) amplified noise from racing engines.  An agreement to race is NOT required.

The penalties for drag racing are severe.  If you are a junior operator, or have a learners permit, this is a civil motor vehicle infraction for which the current fine is $500.00 and a loss of license for no less than 30 days, or loss of learners permit for 1 year.  A subsequent offender with a junior operator or individual with a learners permit will be fined $1,000.00, lose their license for no less than 60 days, or learner’s permit for 3 years.  In order to get your license you must take and pass a driving test and if you had a learner’s permit you must reapply for your learners permit, both after you take an anti-road rage program and a course that “encourages attitudinal changes in young drivers who have committed a violation of the motor vehicle laws.”

An driver that is not a junior operator, or vehicle owner, will be facing criminal charges and if found guilty can be sentenced to 2 1/2 years in a House of Correction or a fine not more than $1,000.00, and a loss of license for not less than 30 days (180 days if a subsequent offense).  If you are cited for or charged with the offense of drag racing you likely be also cited for other civil infractions such as speeding, or criminal charges such as negligent operation of a motor vehicle a/k/a operating to endanger or reckless operation of a motor vehicle.

While many get the urge to see what your vehicle is capable of, the streets are not the proper place.   There are race tracks where you can bring your vehicles to and race in a supervised, controlled environment, such as New England Dragway in Epping, NH.

If you are cited for a criminal motor vehicle offense you are entitled to a Show Cause hearing before the criminal complaint enters, but must request it immediately (with 4 days of the citation) by signing the rear of the citation where indicated and filing it with the Clerk Magistrate of the appropriate District Court.  You are permitted to be represented by counsel at the Show Cause hearing, but at this stage in the process you must retain your own attorney.  If you are facing a criminal charges, relating to the operation of a motor vehicle or otherwise, consider contacting me today about my legal services.

Prior to the enactment of this new law, one would need to seek a restraining order from the Superior Court, under its general equity jurisdiction, unless the parties qualified as family or household members under Chapter 209A of the General Laws.  Family or household members is defined as person who: “ (a) are or were married to one another; (b) are or were residing together in the same household; (c) are or were related by blood or marriage; (d) having a child in common regardless of whether they have ever married or lived together; or (e) are or have been in a substantive dating or engagement relationship, which shall be adjudged by district, probate or Boston municipal courts consideration of the following factors: (1) the length of time of the relationship; (2) the type of relationship; (3) the frequency of interaction between the parties; and (4) if the relationship has been terminated by either person, the length of time elapsed since the termination of the relationship.”  See MGL c. 209A, § 1.

While an application for a restraining order under Chapter 209A did not have any filing or service fees, an action in the Superior Court does unless the party is indigent.  The Superior Court filing fee is a total $275.00, plus $90.00 for the restraining order, as well as fees for service upon the defendant.  The new Chapter 258E, like Chapter 209A, does not have a filing fee.

If one is being harassed, which is defined as “(i) 3 or more acts of willful and malicious conduct aimed at a specific person committed with the intent to cause fear, intimidation, abuse or damage to property and that does in fact cause fear, intimidation, abuse or damage to property; or (ii) an act that: (A) by force, threat or duress causes another to involuntarily engage in sexual relations; or (B) constitutes a violation of section 13B, 13F, 13H, 22, 22A, 23, 24, 24B, 26C, 43 or 43A of chapter 265 or section 3 of chapter 272″, one can now apply to the court for a harassment prevention, regardless of the presence of any family relationship.

A defendant in an action under Chapter 258E can be ordered to: “(i)  refrain from abusing or harassing the plaintiff, whether the defendant is an adult or minor; (ii)  refrain from contacting the plaintiff, unless authorized by the court, whether the defendant is an adult or minor; (iii)  remain away from the plaintiff’s household or workplace, whether the defendant is an adult or minor; and (iv)  pay the plaintiff monetary compensation for the losses suffered as a direct result of the harassment; provided, however, that compensatory damages shall include, but shall not be limited to, loss of earnings, out-of-pocket losses for injuries sustained or property damaged, cost of replacement of locks, medical expenses, cost for obtaining an unlisted phone number and reasonable attorney’s fees.”

The definition of abuse under Chapter 209A and harassment under Chapter 258E is different, therefore a party that may not meet the standard to have an order enter under Chapter 209A, may now able to get an order under Chapter 258E.  Although the proceedings under Chapter 258E are civil in nature, a violation of the order is criminal, the same as under Chapter 209A.  A violation of an order under Chapter 258E can result in a fine of not more than $5,000.00, imprisonment in a House of Correction for up to 2 1/2 years, or both.

If you need to apply for a Harassment Prevention Order go to your local court during normal business hours, or your local police department at anytime.

Update (February 19, 2010):  The bill was not enacted as an emergency law, therefore it will not be effective until ninety (90) days after signing, on May 10, 2010.  Do not take chances with your safety.  If you believe you are being harassed, threatened, stalked, etc. contact your local police department.

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One option is for you, the judgment creditor (“creditor”), to file a Supplementary Process action against the defendant, now the judgment debtor (“debtor”). Small claim actions have a “built in” process very similar to Supplementary Process.  The judgment debtor in a Supplementary Process action can be a natural person, a corporation, a trust, a society, a partnership, an incorporated or an unincorporated association, or any other legal entity.

Supplementary Process in Massachusetts is a governed by statute, specifically chapter 224 of the General Laws.  Unless the judgment is from the Housing Court, the venue for Supplementary Process is the District Court or the Boston Municipal Court, regardless of the judgment amount.  The Housing Court hears Supplementary Process actions to regarding judgments it enters.  The action is filed in the court within whose judicial district the judgment debtor resides, or has a usual place of business. If the judgment debtor does not reside, or have a usual place of business in Massachusetts, the action can be filed within the judicial district where the judgment entered.

Supplementary Process is commenced by filing an application with the court, along with the original execution or a certified copy of the judgment.  The court will issue a summons to the creditor for service that orders the debtor to appear in court at a specific time to be examined as to its property and ability to pay.  The creditor is responsible for having the debtor served in the required manner by an officer qualified to serve civil process.

At the court hearing the creditor, or its attorney, will usually first speak to the debtor informally about its assets, employment, and overall ability to pay the judgment either in full, or over time.  After that discussion the parties may agree that the action be continued or a payment order be entered by the court.  Both parties have the right to have the matter go before a judge and must do so if an agreement cannot be reached.

When the creditor and debtor cannot agree to a payment plan, or that the action be continued or dismissed, the creditor will examine the debtor before the court about its assets (i.e. real and personal property, employment, etc.).   The creditor may call witnesses, who may appear voluntarily, or by subpoena to testify.  The creditor has the burden of providing sufficient evidence to the court for find that the debtor has non-exempt assets, or the ability to pay, the court may order the debtor to produce the property or make payments to the creditor.  A debtor can be held in contempt if it fails to comply with the court’s order.

A debtor cannot be ordered to produce exempt property, or make payments from protected sources of income.  The courts payment order form lists the common exemptions on the back page.

Although not utilized as often, Supplementary Process also allows a creditor to:

• Arrest the Debtor on Execution (M.G.L. c.224 § 6)
• Charge that the judgment debtor has, per M.G.L. c. § 19
  • “[s]ince the debt was contracted or the cause of action accrued, the defendant or debtor has fraudulently conveyed, concealed or otherwise disposed of the whole or a part of his or its property, with intent to secure it to his or its own use or to defraud his or its creditor;”
  • “[s]ince the debt was contracted or the cause of action accrued, the defendant or debtor has hazarded his or its money or other property to the value of one hundred dollars or more in some kind of gaming prohibited by the laws of this commonwealth; or”
  • “if the action was founded on contract, the defendant or debtor contracted the debt with intent not to pay it.”

If the debtor fails to appear at the original or continued hearing the court will issue a capias. A capias is a civil arrest warrant.  The creditor, subject to certain limitations, can then have a sheriff or constable arrest the debtor and bring him or her to the court.  The sheriff or constable will often try to arrange for the debtor to appear at the court on a specified date and time to surrender.  If the debtor does not voluntarily come to court the sheriff or constable, if instructed, will physically apprehend the debtor and take them to court.

If you have a judgment against a person or a company, or an attorney that has obtained judgment for a client, that is not being paid feel free to contact me to discuss how I can be of service to you.

First, let’s clarify a common myth.  With few, if any, exceptions legal papers do not need to be served in hand.  They may be left at your last and usual place of abode or if you are a company then to an officer or a person in charge at your principal place of business.  They also do not always need to be mailed as well.  Service is governed by statutes and the applicable rules for the court the proceeding is in.  If you disagree with how the papers were served you should not ignore them as if the court finds that you had notice and failed to act there can be negative consequences.  Below I will summarize some of the common types of items that may be served.

When a civil lawsuit is initiated against you will be served with a summons along with a copy of the complaint and maybe some other papers as well.  The do what you need to do.  Specifically, that you need to file and serve an answer, along with any counterclaims you may have, within 20 days of service.  If you fail to do so you will likely be defaulted in judgment entered against you.  You do not want to ignore it summons for any reason as you may be giving up any chance to dispute the complaint against you.

Another type of summons that is commonly served will be related to a supplementary process action.  This summons will require that you appear at the court house on a specific date and time in order to be examined as to your financial status.  A supplementary process action is commenced after a judgment entered against you by a judgment creditor in order to review your financial situation and if possible seek an order that you make payments towards the judgment.  Again, you do not want to ignore this summons because if you fail to appear at court capias may issue.

A capias is a civil arrest warrant that can be served by a constable or deputy sheriff.  Often when a capias is served the Constable or sheriff will make arrangements for you to surrender to them at the court house, they are authorized to physically compel your presence if necessary.  If there is a capias issued against you, you should go to the court and speak to be clerk about filing a motion to remove your default and recall the capias.

Another common type of document served a subpoena.  A subpoena will require the recipient to present themselves or documents for questioning or inspection at a specific date and time.  You may be subpoenaed to appear at a deposition (out-of-court) or trial to give testimony.  If you ignore a subpoena there will likely be negative consequences.  If you feel that you should not be compelled to testify or produce documents you can challenge the subpoena in court or ask the court for a protective order.  This must be done before the date you are required to appear and is done by a motion to the court.  You should speak to an attorney to discuss your options and how to proceed.

Rarely served by a Constable or sheriff is a notice of small claim.  This document will often be sent by first-class mail.  This document will be sent to inform you that a small claim action has been commenced against you and you need to appear a certain date and time at court to defend against it. If  you do not appear at court and judgment will be taken out against you and you will receive a second notice that judgment entered in that you need to appear for a payment review hearing.  It again you do not appear, then he capias as discussed above will issue.

This is not an all inclusive list of possible items that can be served.  Whenever you have been served with what looks to be legal process you should consult with a lawyer about what your obligations are and how having a lawyer may be of assistance.

Many people choose to represent themselves, or do other work themselves, because they do not feel that they can justify the expense of an attorney or another professional to do work for them. If you have an electrical, plumbing, or other problem in your home do you immediately try to fix it yourself call a professional? Before you think about how much it will cost to hire a professional, you need to think about how much it will cost not to. The same consideration should be given when you facing a legal problem. Professionals are trained to provide services to people in their field of expertise. Because the practice their trade every day they see many different situations and know how to respond. Personally, when I am having a problem with my car and bring it to Doug’s Automotive and rely on his training and years of experience to correctly diagnose the problem, as he is seen far more automotive issues than I have. The same applies when I have a plumbing issue that needs to be address. I contact CROY Plumbing to take a look at this is what they do best.

Just because I may be able to make repair to some of these repairs myself these trained professionals can often repair the problem faster than I could have on my own. Also, it may end up costing me more to do it myself because of the time it will take and risks of making mistakes.

The same analysis applies when being faced with a legal issue. While you are permitted to, and may be able to, represent yourself you should strongly consider speaking to an attorney. An attorney is going to be intimately familiar with the various procedural rules, evidentiary standards, and the laws related to the claims by or against you. An attorney is going to be able to analyze the claims and discuss with you your options to be sure that you make an informed decision about how to proceed.

If you find yourself faced with a legal problem, although you may represent yourself, you should consider speaking to an attorney first.  If you truly feel you cannot afford an attorney you may be qualify to speak to an attorney at a legal assistance office.  Many attorneys also offer a no-cost initial consultation.

I have been practicing law since 2003 representing individuals and businesses in a variety of different areas.  I have worked with companies to manage their accounts receivables (collections), prosecute claims they have, and to defend various claim made against them.  I have also represented individuals who facing various claims against them of a criminal, family or domestic relations, or civil nature.  Read more about me here.

I encourage you to bookmark my site and subscribe to the RSS feed to stay up to date on firm news and events, as well as get my thoughts on various legal issues that may affect you, or those close to you.