Collecting money owed to your company is arguably the most important part of running a business. If you’re not getting paid for the products or services you provide to customers, chances are you won’t be able to remain operational for long. Unfortunately, situations can arise where a vendor, customer, or contractor refuses to pay what they owe. It is critical for your business to do what is necessary to collect these debts. For this reason, you should be aware of the legal procedure for suing to collect money another businesses that owes you.
If the debtor refuses to pay, you can sue him in Pennsylvania court. What court you file suit in depends on how much money you are owed. If you are owed less than $12,000, then you can sue in small claims court. Rules of procedure are relaxed in small claims court and it’s possible you can successfully litigate the case yourself, but you can also have an attorney represent you if you choose. If you cannot bring the case in small claims court, then you will most likely need to file a lawsuit in the Court of Common Pleas for the appropriate county.
After you have filed the lawsuit, but before you can take your case to trial, you may have to satisfy Pennsylvania’s compulsory arbitration requirement. In an effort to ease the burden on the courts, Pennsylvania has adopted a rule that requires cases below a certain monetary threshold to first go before a panel of three arbitrators. Some of Pennsylvania’s federal District Courts have adopted a similar rule. The threshold varies depending on which county’s court you are filing in, but it can be anywhere from $35,000 to $50,000. The arbitration panel will hold a hearing where they will consider the evidence presented by you and the opposing party. They will then make a decision as to how much, if any, money to award you. There is an automatic right to appeal the decision of the arbitrators and have a trial in court as though the arbitration hearing never happened, so you can still have your day in court if you are unhappy with the arbitrator’s award.
Once you have received an award from the arbitrators or a judgment from the court, you must still collect the money. This may not be as easy as it sounds – if the person you were suing wanted to pay you, you wouldn’t have had to sue them in the first place. Depending on what sorts of assets the debtor has, you have a few different choices. If you are able to locate the debtor’s bank account, you can withdraw the money he owes you. You can also ask the sheriff to seize the person’s property and sell it to pay off the debt. You can also place a lien on the debtor’s house or garnish wages.
If you looking for an attorney to file a commercial collections suit on your behalf in Chester County, PA
Please contact Berkowitz Klein LLP today. Our experienced commercial litigation team has been representing businesses as plaintiffs and in the defense of commercial collections lawsuits for over 25 years. Our team of experienced, local litigators is experienced in Pennsylvania’s mandatory arbitration process and bringing matters to trial if necessary. To speak with one of our attorneys, contact Gerald Berkowitz by phone at (610) 364-5082, or by email at [email protected].