The commercial collection of secured debts involves collecting the collateral of a business that has defaulted on an agreement to pay for services or to pay back a loan. As a secured creditor, you have specific rights that enable you to collect the secured debt. Read on to learn about the basic options you have for commercial collections of secured debt.
Repossession of the Collateral
As a secured creditor, you may have the right to repossess the collateral. Usually, there’s no requirement for you to go to court to repossess collateral. That being said, you cannot breach the peace. The practice of repossession is generally used for cars and other vehicles. If you plan to repossess collateral, it’s often beneficial to hire a professional with a good reputation.
Prejudgment Writ of Attachment
If you believe that the debtor may get rid of all their assets, you can apply for prejudgment writ of attachment. This legal action can help protect your interest and make it practically impossible for the debtor to dispose of the property. An experienced commercial collections attorney would know how to do this.
Pursue Court Relief
When you’re dealing with commercial collections of secured debt, you may be eligible to get court relief in other ways, such as applying for a prejudgment writ of possession. Ultimately, it depends on the type of collateral in place. You could benefit from a replevin action if you still hold the title to the property. However, there may be other obligations that you must meet as a creditor for replevin or other forms of court relief. If successful, the court would allow you to send the sheriff to retrieve the property.
Learn More about Commercial Collections of Secured Debts
Because secured debts are handled differently than unsecured debts, you meet with an experienced commercial collections attorney to learn more about your options. Your collections strategy should be customized to meet the needs of your business and it should comply with California law.