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In this week’s video, Parris D. Trimble, Esq. discusses why Greenbaum Law Group, LLP does not send demand letters for commercial debt collections, filing the lawsuit instead.

Full Transcript

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm.

You might have seen some of my other videos where I provide tips on how to write a demand letter and how to make the collection phone call. In those videos, I state that we don’t do that here at Greenbaum Law Group, now why is that? We have found that in general, that phone calls and demand letters aren’t that effective when it comes to commercial debt.

Let’s say that we had a hundred commercial debt cases, and we made phone calls and sent them add letters to all 100, maybe 5 to 10 would settle. Those are really great odds. Let’s think about this for a minute. Let’s say that you receive a demand letter in the mail, what do you typically do? Most people here in California know at least three attorneys on a first-name basis, in fact, you may even have an attorney in their family or in your close network of friends.

So you call your attorney friend and say hey I received this demand letter, can you write a response? Typically most of the time they will. Perhaps they’ll say oh we didn’t receive the invoices or oh the work wasn’t done properly. Again this is just dragging on the process and not getting you any closer to getting paid.

Now, let’s look at another scenario. Instead of sending a demand letter we file a lawsuit, and the lawsuit is personally served on the debtor. So now the debtor picks up the phone and calls his attorney friend and the attorney is much less willing to jump in and represent the party in the action, especially without being paid. We find that collection letters and phone calls simply aren’t that effective, and we jump straight into filing a lawsuit.

In this YouTube video, Parris Trimble breaks down the differences between Consumer Debt and Commercial Debt and gives us specific examples of each.

Full Transcript:

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm. Here at Greenbaum Law Group, we only take cases that involve commercial debt and do not take cases that involve consumer debt. You may be wondering what is the difference between commercial and consumer debt. In today’s video, I will give you a brief very general overview of the two types of debt.

Let’s start with consumer debt, this is something we are all too familiar with. Consumer debt is sometimes called retail debt, and it is debt that is incurred by an individual in the course of their daily living. Consumer Debt is the money you owe as a result of purchases that you made for you or your family members. Let’s look at a couple of examples. You go to Macy’s to buy new clothes for your infant and charge it to your Macy’s card, that’s consumer debt. Or perhaps you have termites and you tent your house, money owed to the Exterminator- that’s consumer debt.

Now, let’s look at commercial debt. Commercial debt is typically debt that’s incurred between businesses. Now, it’s even the case if the business is a sole proprietorship or partnership. An example of a commercial debt could be unpaid invoices for a bulk supply of sweatshirts to a retail shop or say I want to start a new pizza parlor and I go out and get a small business loan to start the pizza parlor, the business loan is commercial debt.

Now, let’s look at an item and see how the item could be a commercial debt or a consumer debt. The example I’m going to use is a dining table. If I go out tonight and buy a new dining table for my kitchen at home and put it on my Visa card, that’s consumer debt. However, let’s say I want 20 new dining tables for my pizza parlor, the 20 dining tables for my business is business debt and that is considered a commercial debt.

Recently Parris Trimble, Esq. of Greenbaum Law Group gave a two part video series on how to write your own demand letter. She covers topics ranging from reminding your debtor of the consequences of not paying, to keeping bad content out of your letter and not insulting your debtor.

Here is the full transcript of the video:

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm. Today is my second video wherein I share with you some tips on how to write your own demand letter.

The first tip for today is to remind the debtor of the consequences, and by this I want you to go back and look at your contract or your credit application and look for an attorney’s fees clause or an attorney’s fees provision. These documents often contain an attorney’s fees provision wherein the prevailing party has to pay for the other side’s attorneys fees. If you have an attorney’s fees provision in your contract or your credit application, remind your debtor of this in the demand letter, they may be more likely to pay.

Also, some content simply does not belong in a demand letter. Content such as whining or reminding the debtor how many times you called or emailed and they didn’t respond often doesn’t get you anywhere. The debtors tend to get angry and use it as a reason not to pay, so try to avoid that. And similarly, do not insult the debtor. That doesn’t get you any closer to payment. And don’t call for a compromise. As soon as you suggest that you’ll take less than the full amount owed, it becomes a negotiation. Let the debtor come to you first with a compromise but you don’t offer it first.

Finally, if your demand letter doesn’t work don’t wait. Bad debt is not like fine wine it does not get better with age.

Recently Parris Trimble, Esq. of Greenbaum Law Group gave a two part video series on how to write your own demand letter. She covers topics ranging from knowing who to send the letter to, to keeping it short & simple and more.

Read the Full Transcript Below:

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm. Today is the first of a two-part video where I’m going to share with you some tips on how to write your own demand letter.

The first tip for today is to know who to send the letter to, and by that I mean we often send it to the accounts payable person but the accounts payable person doesn’t always have the authority to write the check. Send it to the CEO or perhaps if the company has an in-house counsel, send it to the in-house Counsel as well. You wanted to send it to as many people as possible. We have this saying around the office that we always want to get stuff off our desk. So if you send it, it’s on everyone’s desk, and if you have something on your desk you look at it and say how do I get rid of this & you give it to the person who can handle it. That’s the goal there. The more persistent you are the more likely you are to get noticed.

The second principle is the kiss principle, keep it short and simple, and by that simply say “we have not received payment for X please make payment to…” This is really short with no feelings and no emotions. Don’t let them have you play the go fetch game. How many times have you heard “Oh we never received the invoice…” send a copy of the unpaid invoice with the demand letter to cut out that extra step.

And finally, don’t give extended payment terms. Shift the burden over to them. For example, you can say “If payment is not received by X date” maybe 5 or 10 days away, “we understand this as your invitation to…” then you can either say “begin collection proceedings” or “to suspend your account”

Next week, we will cover more of this topic in our post “How to Write a Demand Letter – Part 2.”