shape
shape
shape
shape
shape
shape
2 November 2023 / Gary S. Marszal

So Now What? The Next Steps in Your Recovery Process

After countless calls and past due notices throughout delinquency, the consumer still has not made a payment or brought the file current, the collateral may have been repossessed and sold leaving a deficiency balance. The file is now charged off… So now what? What is the next logical step to recover the money owed?
 

For some creditors, the options are: 

  • Continue in-house collection attempts 
  • Offer bargain basement settlement options 
  • Outsource to a collection agency to continue the calling, lettering, and digital contact efforts
  • Place the file in a queue of charged-off assets and do nothing 
  • Place the file in a sales queue 
 
However, many creditors have learned of another option, filing a lawsuit. A legal strategy and the potential of a judgment award are a sound and pragmatic approach to managing charged off debt. Let’s look at why a legal strategy may be the right approach.
 

The litigation strategy offers the following benefits: 

  • Extends the statute of limitations 
  • Allows courts to assist in involuntary remedies to collect funds if needed
  • Judgment awards can add interest and attorney fees to offset the delay in recovery and costs of managing a litigation program
 
Often consumers do not respond because they just don’t know what to do to resolve the matter.  They may feel that the only options were already provided and they could not meet those options. 
 
However, once a consumer is served with the summons and complaint the file takes on a new level of seriousness and at this point, a consumer will often reach out to see what options are available. Many of these consumers will end up speaking to a collection professional at the law firm handling the matter. These representatives are trained on not just the legal process but in a manner that will treat the consumer with respect, dignity, and understanding. By approaching consumers in this manner, often the debt can be resolved amicably with both sides reaching a mutual agreement that will resolve the file without the additional expense and embarrassment of post-judgment remedies.  
 
In the cases where the consumer still has not engaged and if a court awards the creditor a judgment, at this point, the law firm handling the matter can use the remedies available in their state to recover funds.
 

These remedies vary from state to state and can include:

  • Filing a judgment lien 
  • Garnishing non-exempt wages 
  • Garnishing non-exempt bank deposits 
  • Deposing a consumer under oath to answer questions about income and assets
  • Non-exempt personal property attachments 
  • Garnishing of state tax refunds (Michigan) 
  • Attaching non-exempt sources of income other than wages 
  • Suspension of driver’s license privileges (subrogation claims) 
  • Subpoena of a third party for asset information 
 
While each of these remedies has its own nuances, sometimes complicated by state law, creditors who use a legal strategy recover far more and realize a significant ROI compared to those who do not. 

If you have any questions, contact director of legal collections Gary Marszal at any time. 
 
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

Related Publications

Insights / 18 March 2025

The Need for Cyber Liability Insurance in Debt Collection

In today's digital age, cyber threats are no longer just a concern for large corporations. From data breaches to ransomware, the consequences of a cyber incident can be devastating, ranging from financial losses and reputational harm to legal liabilities.
Read More
Insights / 11 March 2025

Bankruptcy Filings Surge: A 23.5% Increase in 2025 Amid Economic Pressures

According to recently published data from Epiq Bankruptcy Analytics, the upward trend of bankruptcy filings continues nationwide. Total bankruptcy filings year-to-date in 2025 are up 23.5% over 2024, while total chapter 7 filings show a 19.8% increase, and chapter 13 filings show an 8.3% increase.
Read More
News / 3 March 2025

Weltman Expands Presence with New Office in Sarasota, Florida

Weltman, Weinberg & Reis Co., LPA (Weltman) is excited to officially announce the opening of their Florida office in the city of Sarasota.
Read More

Join Our Email List

Get the latest articles and news delivered to your email inbox!
Subscribe

Contact Gary

Gary S. Marszal

Director of Legal Collections
Contact

Join Our Email List