Legal Firm Collection Processes
Have you ever wondered what a law firm does when it receives a new file from a Management Company for collections? The process can be convoluted and involved.
File is Received From Management Company: A new Matter is opened into our database for the individual Unit, including all Owners and contact information provided.
Review of the Information Received From the Management Company: Our office performs a review of the information received from the Management Company to ensure that all Notices and Notifications were sent/made in accordance with the Association’s Collection Policy. Please see below for a full list of required items. If this information is not available, then we contact the Management Company to determine that the collection processes were followed per the Collection Policy and to request the missing information. In order to protect the Association, our file cannot proceed until this information is received and reviewed. If the Collection Policy was not followed, our office is not able to proceed any further until the collection processes are completed.
Ownership Verification: Upon receipt of the information listed below, our office checks Bankruptcy records to see if the Owner(s) are in bankruptcy, Public Trustee records to determine if a Public Trustee Foreclosure is in place already, check the Assessor’s office, Clerk & Recorder’s office, Ownership & Encumbrance report and Ledger to determine all known addresses for the Owner(s) as our office is required to send the Demand Letter to all Owners at all known addresses in order to comply with FDCPA.
Demand Letter: A Demand Letter and Debt Verification Form are drafted and sent to the Owners to all known addresses, which provide the Owners thirty days to respond to the Demand Letter. In that time, the Owners can contact our office, can pay the account, dispute the debt, can set up a payment plan or simply ignore the Demand Letter.
Lien: A Lien is filed against the Unit with the applicable County Clerk & Recorder’s office.
As you can see, there are numerous steps that our office must undertake before a Demand Letter can be mailed to the Owner(s). The process of obtaining confirmations of the collection processes or copies of the missing documents can take days (or at time weeks), and during that time, our office is unable to proceed or speak to an Owner if the Management Company directs them to our office. At such, it is imperative that all the necessary records be sent with the delinquency file. These are:
Copies of all letters sent to the Owner(s) regarding the Delinquency;
Proof of Certified Mailing of the Notices;
Proof of contacting the Owner via two of the three allowed methods of additional communication, which are via email, text or telephone call;
A ledger starting at $0 balance;
Minutes from the Executive Session of the Board of Directors meeting where the Board of Directors voted to transfer the file to legal counsel for collections; and
The Board of Directors Resolution transferring the file to legal counsel (if applicable)
We hope this helps in explaining our processes and look forward to working with you on all your future legal needs.
Do you have additional questions about these or other legal matters?
If so, we are here to help, please contact us at info@westernlawgroup.com.
THIS IS NOT LEGAL ADVICE. FOR INFORMATIONAL PURPOSES ONLY.
