Individuals Defaulting On Loans And Accounts-Payable

The downturn of the economy has resulted in both businesses and individuals defaulting in loans or accounts-payable.  Not only have banks been suffering from the repercussions, but also small businesses and individual lenders as well.  Unfortunately, our firm has been consulted by a significant number of clients who have contracts, promissory notes, or invoices with out an attorney's fee provision.  While the economy was booming, and while optimism was high, the terms of contracts were not a focus during negotiations.  Now, however, as borrowers or customers default on those contracts or accounts, the terms become essential as they govern the rights and remedies between the parties.   Without an attorney's fee provision, the party trying to collect must pay for the legal fees involved out of its own pocket and is unable to recover the amounts expended from the debtor.  It is imperative that in any exchange of money, goods, or services, there is a contract in writing with an attorney's fees provision requiring that any attorney's fees or costs expended in any attempts to collect are recoverable.  If you are unsure if your current contracts or invoices contain a sufficient provision, our firm can review your documents for a low fee.  This could save you a significant amount of money in the event that you have to initiate a lawsuit to collect.

Article Submitted By: Attorney Min N. Thai