Wisconsin Business Law and Litigation
A blog dedicated to Wisconsin business law and business litigation matters, authored by Chris Moander of the Moander Law Firm.

As more food for thought, I’ve guest posted on my friend Jon Groth’s blog. You can read my post here on the primary collections laws that apply to Wisconsin.

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.

No, that’s not really a joke - it’s the point of the following post, that properly organizing your accounts receivable files and other debt-oriented materials is a really good idea!

So, the time has come to face a debtor that has vexed collection efforts at every turn. Your collector is lined up and has begun preparations for what may lie ahead. When you turn over the debtor’s file, what will the collector find?

Organization is key in a collection matter, but is secondary to timing. As you have likely encountered, debtors (feeling desperate) often resort to running, hiding, liquidating assets/collateral, and any number of other evasion tactics. To reduce losses caused by debtor avoidance maneuvers, your business might consider confirming that certain documents are preserved, properly organized, and easily accessible. It is likely you have an existing need to maintain these records, including:

• The name, address, telephone number, Social Security number, a copy of the debtor’s driver license, and other information used to identify the debtor.
• If the debtor is a business, the contact person at the company
• Credit applications
• Debtor-signed contract or agreement
• Financial statements
• Ledger’s reflecting the debt, including the life cycle to date of your company’s relationship with the debtor
• Correspondence to debtor from your company (i.e. in-house collection documentation): emails, letters, and any other kind of documentation
• UCC financing statements
• Copies of debtor’s checks, including those that cleared and any declared NSF.
• Tax returns (for both individuals and companies)
• Records of prior relationship(s) between debtor and creditor to establish a course-of-dealing
• Any other relevant or applicable information

The list above isn’t exhaustive, but it conveys the idea of what information your business will need to organize and secure. When your collector examines these files, he or she will be able to: (1) get a sense of the debtor’s legal composition (otherwise extra research may be required); (2) potential alternatives to litigation (i.e. arbitration); and (3) whether interim relief is available (pre-suit garnishments). Because time is of the essence, you collector can move faster with organized files and thus increase the likelihood of collection and reduce costs across the board - the key value in proper document organization!

Moander Law Firm

Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.