A creditor’s relationship with a debtor begins with the credit application. Thus, creditors should not treat this document as a formality, but as a crucial step in learning about the borrower. A creditor generally has certain requirements that must be met before a loan will be given or credit will be established, but many fail to look for “red flags” if these requirements are met. Below are 7 red flags creditors should be aware of:
- client uses a post office or mailing service address
- client lives out of state or conducts no business within the state
- client is never available when the creditor calls
- borrower complains about guaranteeing the debt or the use of an attorney’s fee provision in the contract/invoices
- name and address on checks used to pay borrower’s account do not match client’s name and address
- client always pays by money order or cash
- client repeatedly pays with insufficient or post-dated checks
These are just a few items that may indicate the client could be trouble. Ultimately, it comes down to learning as much as you can about the borrower. If you discover information that is inconsistent or insufficient, it is important to clarify it with the borrower before the loan is made or credit is extended.
If you need legal help with collection efforts against a borrower (or several borrowers), contact Windtberg & Zdancewicz, PLC to schedule an appointment. Our attorneys are experienced and knowledgeable in all matters related to creditor’s rights.
The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation. We handle many types of business disputes on behalf of both creditors and debtors. Our attorneys handle cases from pre-litigation negotiations through litigation, obtaining and enforcing judgments to collect what our clients are owed. We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases. If you need assistance, or are interested in learning more, please contact us at (480) 584-5660.