Generating revenue and getting paid for providing goods or services to others is the ultimate reason why there is any purpose of doing business. In several instances, other businesses are themselves the customers to whom the goods or services are being provided. Like any professional relationship, conditions are bound to arise in which it becomes challenging for one party to collect from another. The explanation for non-payment varies, and could vary from a product or service conflict on the part of the indebted party to cash flow issues. Needless to say, getting paid is an extremely important part of running a business.
Collection of debts is governed both by the Federal Fair Debt Collection Practices Act (the “FDCPA”) and the Wisconsin Consumer Act. Violations of these statutes can be punished with stiff penalties. However, with the right knowledge of law and by discussing your matter with an expert business collection attorney, you can collect your debts and improve your cash flow.
COLLECTING DEBT IN WISCONSIN
To properly assess the relative pros and cons of the creditors ‘ claims one must review all the claim facts. All documents related to the duty should be used by the creditor, including, where possible, correspondence between the debtor and the creditor, internal documentation, title reports, and reported or published documents such as the files of Uniform Commercial Code financial statements.
It is often advised to send a default notice or demand letter first before filing a lawsuit. If the demand does not result in payment of the obligation, the next move would be to institute a lawsuit. Be mindful, however, that litigation isn’t always the best solution. First, be sure to check whether the debtor has filed for bankruptcy before you file a lawsuit, since you may incur substantial penalties if you violate an automatic stay.
A collection agent or the individual responsible to collect the debt which owns a collection account is known to be a creditor. Wisconsin law gives creditors a number of ways to collect debt owed. Before a creditor can use these legal instruments in Wisconsin, the creditor has to go to court to get a judgment against a debtor. After a creditor files a lawsuit a court must hear the case. A hearing can result in the creditor being granted a judgment.
WHAT IF A BUSINESS OR AN INDIVIDUAL CANNOT PAY BACK?
You may opt to offer a discount on the total amount due. This is when the debtor says they don’t have the resources to pay. And, if this debtor wants to come back to your business this can be beneficial. You get to decide on the discounts you offer.
Another strategy is to split up payments on a plan . An experienced attorney can institute a payment plan with default mechanisms to protect your business if a payment is missed.
Keep in mind that you are not obliged to give the debtor a discount. Many collection cases result in a judgment and then full payment thereof.
STATUTE OF LIMITATION FOR DEBT COLLECTION
In Wisconsin the statute of limitations on open accounts and written and oral agreements is 6 years according to Chapter 893.43,PDF. The statute of limitations is 10 years on promissory notes. Wisconsin law forbids any collection efforts on accounts that have passed the statute of limitations period. That rule applies to original creditors and agents of collection. Notwithstanding Wisconsin § 893.05, when the Wisconsin limitation period passes, a creditor may not lodge a debt case.
Where the creditor attempts to collect expired debt, a cause for action under both Wisconsin law and the federal FDCPA is created because any collection actions misrepresent the legal position of the debt.
To discuss your debt collection case, please reach out to us at (920)-921-2300, through our live chat feature, or with our contact us form below.