Promissory Note – The 4 Types And Their Uses.

TJMPA Promissory Note

A promissory note is a debt instrument that lets companies and individuals get financing without needing a bank. This would be any individual or a company willing to carry the note (and provide financing) under the agreed-upon terms. Basically, anyone can be a lender.

A promissory note typically contains the following pertinent information regarding the loan:

  • The parties involved (issuer and payee)
  • The principal amount
  • Interest rate
  • Maturity date
  • How the debt will be paid
  • Consequences for non-payment or default in payment
  • Date and place of issuance
  • Issuer’s signature.

This type of instrument adds weight to an informal handshake between friends, or your cousin’s IOU on a bar napkin. A promissory note is one of a variety of business services that Mr. Maccari offers to his business clients. There are 4 basic types of promissory notes. We will go into the details of each one here.

Due On-Demand Or Default Promissory Note.

This type of promissory note is best to be used between family and friends. It’s that step up from the IOU on a bar napkin we mentioned. This is one of the types of promissory notes best for small loans. Helping your friend buy a moped, or your sister get her cookie business started.

There is no specific date set for when it is due, this lets your sister or friend make good on the loan when they are financially able. There are usually no or low-interest rates.

The big drawback to this type of promissory note is that it may not get paid. You might feel as if your friend or family member has taken advantage of your good nature. There must be a strong foundation of trust between lender and borrower. And as the lender, you need to allow for the fact that you might not get your money back. If you feel this will negatively impact the relationship, don’t do it.

Due On A Specific Date Promissory Note.

This is one of the types of promissory notes that are to the point. It demands the repayment of a loan or debt before a specific date. Use this promissory note when loaning small amounts of money. Like when your roommate’s car breaks down and he needs a few hundred dollars to repair the transmission.

Be sure the person you are lending it to will be solvent enough to make the payment on time. That way you can avoid uncomfortable silences at the dinner table.

Installment Payment Promissory Note.

This is one of those types of promissory notes used when you need to buy something more expensive. When you need to replace your stove or living room furniture is when a promissory note like this is useful. This type of loan can have a higher interest rate attached to it, so buyers beware.

A down payment to reduce the interest amount is typically made. Payments are then divvied up into equal monthly installments including the agreed-upon interest. Once the principal is paid, the debt is discharged. This makes it easier to agree to terms of payment that you can afford.

Installment Payment With a Final Balloon Payment Promissory Note.

A mortgage is a good example of these types of promissory notes. If you are short on cash but expect to refinance or pay off the loan in the future, this note is ideal. The interest rate on this promissory note is usually lower. The principal including interest is paid in equal and consecutive installments. In the end, the loan can be reset or the balance due is paid off (the balloon payment).

We Can Help!

To learn the finer detail of how a promissory note works, call the Law Office of Thomas J. Maccari. We have a long list of satisfied clients who always call on Mr. Maccari for all their legal service needs. We are located in Boca Raton and serve the businesses and residents of Broward and Palm Beach county with pride. Click here or give us a call at (561) 982-9772.

Should a Business Owner Hire a Commercial Collections Attorney During a Pandemic?

TJMPA Commercial Collections

The Coronavirus pandemic has hit many businesses hard, especially in South Florida, where its cities depend on the dining, entertainment, and hotel industries to bolster its once healthy tourism business . The harsh economic reality will undoubtedly face its citizens and businesses alike as government support becomes less available and unpaid bills start piling up. Florida commercial debt collection is on the rise during the pandemic. Many companies are now bracing themselves for the avalanche of businesses that are unable to pay their financial obligations. A recent economic report found that more than 74% of small businesses are now in debt due to the Coronavirus pandemic.

Running a business can be difficult during a pandemic, but what happens when your customers fail to pay you on time or not at all?

 If you’ve tried your best to collect a debt to no avail, it may be time to contact a commercial collections attorney for assistance. Even during a pandemic, you are within your rights to collect a debt that is owed you. The Law Offices of Thomas J. Maccari can assist you with all your commercial debt collection needs at an affordable cost. We have experience collecting debts in many areas, including banks and credit unions, medical providers, hospitals, insurance providers, retail, restaurant, construction industries, and much more.

What are some steps and strategies to collect a debt?

  1. Send a Strong Letter

Before you turn to a commercial collections attorney to help, make sure you have tried all avenues available to you. Take all reasonable steps to collect a debt from your customers by sending a strong debt collection letter. If you receive no response to the initial letter, send out a follow-up letter and then a final letter before taking your case to the next level.

  1. Hire a Collections Agency

Many people hire a collection agency when their payment requests go unanswered. During the age of Covid-19, there may be some consumer agencies in place to help your customers avoid or stop debt collection agencies from harassing you altogether. If you feel that your debt collection requests may violate another’s rights, it’s best to contact a commercial debt collection attorney to assist you with the more complex strategies available to build your case.

  1. Hire a Commercial Debt Collection Attorney

There are many ways in which a debt collections attorney can help. As one of the strategies for commercial collections, your attorney may first send out a well-crafted letter to help move the situation towards a positive resolution. Your attorney may also garnish and freeze the bank account of a debtor. In some cases, they may seek to litigate your case by filing a lawsuit in court to seek a judgment in your favor. Once a favorable judgment is received, a commercial debt collection attorney can also help you navigate the debt collection process.

Why contact a commercial debt collection attorney today?

Thomas J. Maccari, P.A., is an experienced commercial debt collection attorney located in sunny South Florida in the beautiful city of Boca Raton. We have been serving  the entire South Florida area for more than 20 years. We provide personalized attention and real solutions, along with the best legal strategies to collect your debts as quickly as possible. Call us today for a free consultation at (561) 982-9772.

What is Contributing to the Rise in 
Debt Claims?

TJMPA Debt Collection

Debt Collection Attorney Florida

For more than a decade, the American Bar Association and legal advocacy organizations such as the Legal Services Corporation and the National Legal Aid and Defenders Association have all sounded alarms about the worrisome trends being seen in the civil legal system.

Until recently, these discussions were held between court officials, legal aid advocates, and other insiders concerned about the future of the legal profession. In most states, policymakers have not been part of the conversations about how and why civil court systems are changing, even as it may lead to financial harm among American consumers (especially those stuck in long-term cycles of debt), let alone the strategies to address such issues. Which is why Thomas J. Maccari of Boca Raton wants to bring it out into the light.

Key Factors

The increase in debt claims reflect two other significant national trends:

  1. A rise in household debt, and
  2. The emergence of the debt-buying industry

According to a report from the Federal Reserve Bank of New York, American household debt nearly tripled from $4.6 trillion in 1999 to $12.29 trillion in 2016, essentially overlapping with the period of rapid growth in debt collection litigation. While according to the Urban Institute 2018 report, an estimated 71 million people – over 31% of U.S. adults with a credit history – had debt in collections reported in their credit files, while 1 in 8 households across all income levels had an issue or dispute related to debt, credit, or loans. And none of this data takes into account the recent pandemic and the impact it has had (and continues to have) on household debt.

Most household debt in collections stems from a financial shock, like a job loss, illness, or divorce (again, a lot of which was rampant during the majority of 2020), and reflects the broader financial fragility of many American households. 2 in 5 adults nationwide said that they would not have enough cash to cover an emergency expense of $400 without selling personal property or borrowing money, and 1 out of every 3 families report having no savings. Medical debt can be particularly devastating and accounts for more than half of all collection activity.

Naturally, low and moderate-income families are more disproportionately impacted by debt collection. A 2017 Consumer Financial Protection Bureau survey found that people in the lowest income bracket were 3x as likely as those in the highest income group to have been contracted about a debt collection. They also found people with lower incomes also were more likely to have been sued for a debt.

Who is Collecting This Debt?

Creditors who pursue consumer debts into collection include banks and credit unions, hospitals and other medical providers, utility and telecommunications companies, auto and student lenders, and (increasingly) debt buyers. Debt buyers are firms that purchase defaulted debts from the original creditors at a fraction of the face value, sometimes less than one cent on the dollar, and then attempt to collect on the full amount owed.

Debt buyers are key figures in the many debt collection lawsuits and may have played a significant role in the rise of civil debt cases. During the same 20-year time frame that debt claims increased, 1993 – 2013, the total dollar value of debts purchased by debt buyers grew from $8 billion to $98 billion.

Debt buyers employ various collection methods, but they are increasingly relying on litigation. Two of the largest publicly traded debt buyers, Encore Capitol and Portfolio Recovery Associates, saw their legal collections grow 184% and 220%, respectively, from 2008 to 2018.

The Thomas J. Maccari difference

While debt buyers are among the most active civil court users, a debt collection attorney with experience collecting commercial debt in Florida can steer clear of such extreme measures, which is better for your business and better for the collection industry as a whole.

Business is an extension of people. Knowing why people slide into financial hardship makes it easier to know why a business stops paying its debts. When you partner with the Law Office of Thomas J. Maccari, you are working with a full-service law firm that is ready to assist you with all of your commercial collection, lien enforcement and civil litigation needs. Contact us here or call us today at 561.982.9772, and rest assured you are putting a collection professional to work for you!

Collecting Debt During and After a Disaster

TJMPA Debt Collection

 Learn from The Past or Be Doomed to Repeat It Debt Collection During Covid-19

 It is an often-repeated refrain that the past is something from which we must learn. Obviously, COVID-19 and everything it entails creates unique challenges for debt collections. However, the Law Firm of Thomas J Maccari wants you to know how the lessons learned from the most recent recession can help Florida debt collectors now, and what important differences there are to navigate.

Flashback to 2008

There are several things the collection industry did not do during the last global financial crisis of 2008. Specifically:

  • There was no differentiation of customers who would not have been in the situation were it not for the crash. In 2020, that would mean not identifying customers entering collection purely because of COVID-19, and that failure is a mistake.
  • Failure to identify how these customers would perform compared to every-day collections customers:
    • Not profiling behaviors to see how they differed in a collection situation
    • No reviewing how they behaved just before they came into collections
    • Not assessing how they may behave once the crisis that triggered their financial stress started to pass
    • Not profiling their likely return to financial stability and not understanding any differences in their financial morality

By failing to consider those behaviors, the industry did not change their:

  • Segmentation
  • Strategies
  • Treatment paths
  • Policies, or
  • Solution range

In the two years leading up to the crash, the average return to financial stability took 2.5 years. Meaning, if a customer had gone into collections and recovery, it was typically 2.5 years from the point of entering collections to when the debt purchaser would be able to get into a routine payment habit with the indebted customer.

The two years after 2008, that period of return to financial good was reduced to nine months. This is due to customers rolling into collections that were actually good, conscientious customers with a short-term payment problem. They have a very different financial sensibility and profile, and are soon back to employment and earning again, hence the return to good status. Treating these customers with the right outcomes now can generate a lifetime of loyalty.

The difference between the Crash of ’08 and the Coronavirus? The scale of vulnerability in both the short and long term appears greater, unfortunately. 

What’s Next?

Currently, operations are doing their best to deal with a huge increase in customer calls, driven by the respective relief and earning protection programs across the different markets. Lenders and Debt Control Agencies (DCAs) have been trying to maintain business continuity while also dealing with a significant reduction in their workforce and the challenges of the new remote/work from home practices for those who have remained.

Somewhere in that mix, it is important for the team to be asking:

  • What do I need to do today to ensure we are well-positioned to manage what will be a far larger collections portfolio in the near future?
  • And how do we do this without creating bad customer sentiment or losing future good customers?

These two considerations help determine how rapidly and strongly a collections team emerges from the crisis. Those who do not carry out the correct actions today are likely to still be blaming the crisis after it will be, in fact, long gone.

Here and Now

Embrace a digital customer engagement that supports scalability and a seamless, secure journey for the customer, as well as a release of pressure on the call center workforce.

There is important information you can capture today that you may not have chosen to in the past. When the initial tsunami of calls begins to subside, you will have a large book that requires work. Collections, risk and operations executives will require that data to help them:

  • Understand the differences between COVID-19-related debt and non-COVID-related debt
  • Identify the customers that traditional collections risk analytics apply to, and those for whom it is antiquated or redundant
  • Determine the likely return to good financial status by reviewing data such as:
    • Were they in a protected industry?
    • What drove their reduction in income? Was it:
      • Furlough (and if so, with what degree of protection)?
      • Redundancy?
      • Sickness?
    • What has been the true impact on disposable income, and can open banking support and validate the impact?
    • What is their likely return to good trajectory given their household dynamics and industry sector?

No Conclusion Yet (but soon)

The Law Firm of Thomas J Maccari of Boca Raton provides assistance with commercial and corporate debt collection services, lien enforcement, civil litigation and more. Working with our clients across various sectors, we have seen first-hand what best practices in collections looks like today. Give us a call at 561-982-9772 to learn more about how we provide the best solutions to your collection issues, and visit us back here for more tips and solutions to give you the best possible results in the quickest possible time frame.

Don’t Get Frozen Out From Collecting The Debt You Are Owed

TJMPA Commercial Collections

Collections Attorney Thomas Maccari Boca Raton

Don’t Get Frozen Out From Collecting The Debt You Are Owed

While the rest of the nation is starting to feel the ‘change of the season’ and cooler temperatures, now is a great time to warm up those that owe you or your company money to paying those outstanding debts.

The Law Firm of Thomas J. Maccari, PA in Boca Raton has been serving those owed money in the State of Florida for over 20 years. We combine the latest technology with our 20+ years of experience to ensure you receive superior representation and superior results in collecting your outstanding debts.

Find out how we can provide you with the highest debt collection rates at an affordable cost. While we have expertise in the collection of debts in the construction, insurance, retail, restaurant and plumbing industries, our experience is not limited to those industries.

Find out how we can assist you in your debt collection needs. Request a consultation today by filling out the form on our Contact Us page or give  us a call at 561-982-9772. We are here to help you with all your commercial collections, lien enforcement and civil litigation needs.

Why Choose Attorney Thomas J Maccari, PA?

When it comes to collecting a commercial  that is owed to your South Florida company, there are a lot of collection agencies to choose from. To insure you get the best legal representation and to give you the highest probability of collecting that debt, choose a reputable collection attorney. Having a lawyer handle your collections gives you an increased probability of success.

At Thomas J. Maccari, PA, we combine the latest technology with our 20+ years of experience as a bonded collections lawyer in the state of Florida. This offers you superior representation and superior results. We understand the unique aspects of corporate collections in Florida and as such, can offer

you an insider’s advantage and useful tips that you wouldn’t normally enjoy with a standard collection agency.

Whether you need assistance with commercial and corporate debt collection services, lien #enforcement or need help with civil litigation, our law offices are your go to solution in Florida. Give us a call at 561-982-9772 to find out how we can provide the best solutions to your collection issues and give you the best possible results in the quickest possible time frame.

Mechanic’s Liens Bonds Explained

TJMPA Commercial Collections

Boca Raton Florida construction site

Mechanic’s Liens Bonds Explained

The Florida construction industry continues to flourish even in this rapidly changing world, but the industry remains fluid. Projects can be started, delayed, and even cancelled midstream without warning.

For this reason, contractors, sub-contractors and materialmen must be versatile enough to handle the changing conditions but savvy enough to protect their investments in the midst of turmoil.

Likewise, general contractors and owners will sometimes “bond-off” a project to protect the integrity of the title to the subject property.

One measure of protection in the construction process for general contractors is the establishment of a mechanic’s lien bond at the onset of a major project.

What is a Mechanic’s Lien Bond?

A mechanic’s lien is essentially an insurance protection for sub-contractors and materialmen while a bond can be seen as protection for the owners and general contractors. Mechanic’s lien bonds provide the safety net that owners may require for new ventures or when there is a dispute regarding payment of a construction project.
A large number of major construction projects in the United States remain unfinished each year (even more in South Florida ) due to cost issues such as lack of funding or loss of investor backing. The bonding process is a way to ensure that contractors will receive their payment in the event that a project is unfinished or when general contractors remain unpaid.

Protecting your right to make a claim on the Bond

Generally speaking in Florida a mechanic’s lien bond is recorded by the contractor on the property where payment is in question. There are a few steps that must be done in order to protect your right to make a claim on the bond and deadlines must be met for each step.

A qualified law firm can assist with the process, since it is important to get the notices done and served appropriately and with the correct parties. Large construction projects generally have a property owner, a project management firm, and a general contractor. If the notices do not get to the right place the first time, payment could be delayed or even worse, not made at all.. The steps in making a claim on a mechanic’s lien bond may look like this:

  • Advise owner of intent to file lien or make a claim on the bond
  • Serve official notice to owner/ notice to contractor
  • Record a claim of lien and/or serve a notice of non-payment
  • Serve notice of deed claim to owner

We hope this information was helpful. If you find yourself in need of assistance with a mechanic’s lien bond, lien placement or enforcement or a related judgment, we can help. Please contact the Law Office of Thomas J. Maccari, P.A. today!

Winter in Florida…A Great Time to Collect What is Owed You

TJMPA Uncategorized
Well, winter is finally here in South Florida. A time to enjoy perfect weather, family, and friends. Dining out along the sidewalks of Naples, Delray Beach, Fort Lauderdale, and of course South Beach, what could be better? The masses come south from the frigid north and spend their money. This is the time to aggressively pursue collections if you are owed money from a business in Florida. This is the time when restaurants, clothing retailers, tourist shops, and just about every business in Florida makes the majority of their profit for the year. (more…)

Advantages of Using Lawyer for Commercial Collections

TJMPA Uncategorized
add

Commercial Debt Collection: A Look at the Benefits of Using an Attorney

As a Florida business owner, whether big or small, seeking payment on a commercial debt can be a frustrating and time consuming affair, especially if you opt to do it yourself. Here is a look at what the process of debt collection entails and why you might consider utilizing the services of a collections lawyer rather than doing it yourself. (more…)