Colorado Creditor Debt Collection. on-line debtor skip tracing, overshadowing, co-maker notices, debtor's right to cure, Fair Debt Collection Practices Act, creditor collection conduct, validation of debt, overshadowing, statutory interest and matters preceding litigation.

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Most debts are collectible, some are not.

1. If the debtor is a skip, he / she must be located to proceed.  Some debtors skip with frequency, even after process service.  
           a.  Skip would preclude income or bank garnishment.
           b.  If the debtor remains in the same county, transcript of judgment filed with the Clerk & Recorder's Office creates a lien, satisfaction of which would be required by new potential creditors before making a secured loan upon real property or motor vehicles.

2. If the debtor resides or moves out of state, under the Uniform Judgment Act, the Colorado judgment may be registered in the foreign state and enforced in debtor's local area.  Same applies to registering a foreign judgment in Colorado.  Years ago when I lived on the western slope, the Uniform Judgment Act worked quite well against California hunters who trashed hunting lodges and thought they were immune due to the distance.

3. Some debtors simply have no verifiable income or non-exempt assets.

4. If the debtor files bankruptcy, an automatic stay enters immediately which stops all collection activity.  The debt is then uncollectible unless the creditor is secured and receives relief from stay to take possession of the collateral, or perhaps 1.)  the debtor committed a preference or 2.) the bankruptcy is thrown out on the basis of fraud upon the creditors or prior discharge within the proscribed time limits.  These circumstances are unlikely.  Unsecured creditors should plan on a write-off in the event of bankruptcy.

5. While considering legal action referral, creditors should review the account receivable probability of satisfaction.
           a.  If a creditor can answer affirmatively to the below four questions, legal referral is probably worthwhile.  If not, the receivable may be a bad debt charge-off.  
                   1.  Is the underlying claim meritorious, rendering judgment likely?
                   2.  Has the creditor avoided unfair debt collection practices, thereby avoiding a legitimate counter-claim?
                   3.  Is there a probability income or assets can be located to satisfy judgment?
                   4.  If the amount in controversy sufficient to justify the attorney fee and litigation cost expense?
           b.  It is an unwise business decision to throw good money after bad.  That applies whether fees are billed upon an hourly basis or a contingency basis.  Costs will be incurred either way.
           c.  Although any individual case may test an attorney's capabilities, collections are a business - not an esoteric test of skill.  If it appears from the outset that the account is uncollectible, I will quote hourly fees, not contingency fees.  Refer to subparagraphs (a) and (b) above.
           d.  Major credit companies budget bad debt just as they budget office rent, salaries or other expenses.  That doesn't mean they carelessly write-off any individual account receivable.  New businesses may learn the hard way that improper extension of credit may deplete profit or perhaps cause failure of the business.  It is my intent to educate prospective clients to make wise decisions regarding legal action referral.  Pick your battles and cut losses with economic acumen.

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There are delays inherent in collection lawsuits.

1. The whereabouts of the debtor must be known before collection effort or lawsuit may be commenced.  Skip tracing causes delay and expense.

2. Prior to collection referral, each debtor must be provided a notice to cure.  Ten (10) day delay before the notice may be sent + twenty (20) day delay for period to cure = thirty (30) day minimum delay.

3. At commencement of collection efforts, each debtor must be provided a validation letter.  Thirty (30) day delay.  Debtors residing out of state require research into their homestate fair debt collection practice validation law.

4. Once the lawsuit has been filed and served, a period of time elapses before first appearance - sixty (60) day delay.  If the debtor requests trial, litigation will take some time.  Counsel will move the case to final orders hearing as quickly as possible, but court dockets are crowded.

5. Once judgment has been obtained, assets must be located against which garnishment, execution or levy may be made.

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        Sometimes the creditor is not in possession of a promissory note but can obtain debtor's execution on a note to evidence validity of the debt.  If a debtor is willing to execute a note, I advise clients to delay legal referral, obtain an executed promissory note upon terms the debtor can realistically honor, then allow the debtor opportunity to make timely payments or default on the note.  A promissory note will simplify the creditor's collection litigation.  

        Clients may refer to the link to obtain a form promissory note.  Co-makers would require additional documents - consult the attorney.

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        I know creditors may likely be frustrated with a debtor before considering litigation referral.  I am aware money loan, goods or services or were provided to the debtor and payment is past due.  I understand creditors want their money yesterday.

        I am a one horse attorney.  Clients receive my personal, professional attention, and I will not accept a lawsuit if I have insufficient time to timely pursue the case.  It is my standard procedure to open file and commence collection activity within two weeks of receipt of the case, sooner if possible.  I provide scheduled periodic status reports.  If a case hits a brick wall, either because the debtor can not be located or if, after use of judicial remedies, assets can not be found to satisfy judgment, the client will be notified.  If the client can not provide assistance or does not authorize use of an investigator,  I close file and refer the case back to the client.  I am tenacious, but this is a business transaction - particularly if the case was accepted upon a contingency fee.  There must be a reasonable likelihood of judgment satisfaction to justify continued effort.  Also, I request that any prospective client exercise patience within reasonable time limits, or not retain my office.  No attorney can devote his / her time exclusively to one particular case.  These common sense notions apply to every attorney - client relationship.

CRS 5-3-105. Notice to cosigners and similar parties
        (1) No natural person, other than the spouse of the consumer, shall be obligated as a cosigner, co-maker, guarantor, endorser, surety, or similar party with respect to a consumer credit transaction, unless before or contemporaneously with signing any agreement of obligation or any writing setting forth the terms of the consumer's agreement, the person receives a written notice that contains a completed identification of the debt he or she may have to pay and reasonably informs such person of his or her obligation with respect to it.  Such written notice may be set forth in the consumer's agreement of obligation or in a separate writing.  For purposes of this section, the word "co-signer", "co-maker", "guarantor", "endorser", or "surety" means a natural person who, by agreement and without compensation, renders himself or herself liable for the obligation of another in a consumer credit transaction, and the terms "agreement" and "consumer's agreement" mean the original underlying agreement.
        (2) The notice required by this section must be clear and conspicuous notice and comply with the disclosure requirements of 16 C.F.R. § 444.3, 12 C.F.R. § 227.14, or 12 C.F.R. § 535.3.
        (3) The notice required by this section need not be given to a seller, lessor, or lender who is obligated to an assignee of his or her rights.
        (4) A person entitled to notice pursuant to this section shall also be given a copy of any writing setting forth the terms of the consumer's agreement and of any separate agreement of obligation signed by the person entitled to the notice.
        (5) A co-signor is entitled to a notice of right to cure pursuant to sections CRS §§ 5-5-110(4) and 5-5-111(3).

        Where relevant, I utilize the services of independent professionals.  Rates of independent providers of professional services change periodically and billings are not controlled by counsel.

        If retained by counsel as an agent of the attorney, such independent service providers are bound by the attorney-client privilege.  If retained privately by the client, no such agency or confidentiality exists.

        At the time of your first visit, you will be quoted attorney's fees and estimated costs. The quote will be honored for a period of seven (7) days, after which it is subject to change without notice if this office has not been retained.

        I have included a fees and costs page devoted to clear definition and understanding of free first consultation, fees and costs, retainer agreement and terms of representation.  Please refer to the following links.

ELECTION. In most circumstances, I initially make an option offer of 1.) billing to be upon hourly fees, or in the alternative, 2.) quote of a contingency fee, 3.) under some circumstance - quote of a flat fee.  Offered fee options will be up to the client, however client's initial election will be final.  Attorney reserves the right to quote hourly fees only without a contingency fee offer.  Attorney reserves the right to decline any case.