When handling collections of debts, what would make my job a lot easier is if the debt itself was evidenced by writing. This could be in the form of an invoice, purchase order, promissory note, personal guaranty or contract. However, any written memorandum signed by the debtor will work. I have sued on handwritten notes more than once and have always been successful in obtaining judgments thereon. I have also sued successfully on checks evidencing payment on a portion of the debt. Therefore, my advice to everyone is obtain written evidence of the debt
In addition, the writing should include as many terms as possible. For example, a contract, purchase order or invoice should include the specific terms of payment as well as provisions for interest. My clients often want me to include a claim for interest. Right now, the legal rate of interest in Florida is roughly 4.75% per annum which is rather low. By specifying the interest rate to be applied in writing, you may obtain interest up to 18% legally per annum in Florida.
Another important provision to include is what happens in the event of default in payment. In the event of non-payment, the writing should include a provision for attorney’s fees to be paid to the prevailing party. The attorney fee issue is very important because in Florida one can only seek attorney’s fees as the prevailing party if there is a statutory provision or contractual provision. For breach of contract, non-payment of goods and/or money lent, there exists no specific statutory provision to ask for attorney’s fees. Therefore it is imperative that such a provision be included in writing.
I would also recommend that a provision be included as to where any litigation, if necessary, should occur. This is especially important when dealing with an out-of-state debtor. Jurisdiction over an out-of-state debtor may be an issue, however, having a specific written provision stating that exclusive jurisdiction for any disputes shall be in Florida will definitely help.
Finally, the creditor should obtain as much information from the debtor as possible. If the debtor is a corporation, the creditor should always try to obtain at least one personal guarantee. People are more likely to ensure their corporate debts are paid when they will be personally liable otherwise. Important information includes trade references, bank accounts and social security numbers. All of this will help collection if necessary.