Legal Question in Credit and Debt Law in Illinois

Re: How to collect on a note

1. I am going to collect on this note do I bring suit against him or his corporations?

It depends on what the note itself says. If he signed as an individual, you would have to sue/pursue him. However, if he signed as agent of the corporation, or both agent and individually, you could sue both.

2. When I bring suit for judgment what are my pitfalls? (Meaning how can they play with the rules of the court to delay and annoy the system)

Obviously they could claim the note was a forgery, but the payments he already made would defeat that argument. The argument alone could cost you a few months. Additionally, even once the judge says he owes you the money, you have to try and find it, which you acknowledge might be a problem. One trick is to find out how he pays for his leased car. You could subpeona the car company to find out how he pays, and what he claimed his income/assets were at the time of signing the lease.

3. My note states �In the event this note shall be in default, and placed with an attorney for collection, then the undersigned agree to pay all reasonable attorney fees and cost for collection.� What are reasonable costs and will an attorney work for those costs?

Reasonable is what the judge decides is reasonable. A normal collect fee from an attorney is a straight one-third of anything collected, or hourly, from about $100.00 per hour upward.

The problem here is that collecting the atty fee/costs will be just as difficult as collecting the money he already owes.

Good Luck!

-Larry

Re: How to collect on a note

From the facts you state, you have a valid claim for breach of contract, i.e., breach of the promissory note. In these circumstances, a motion for summary judgment -- something that does not require a full trial -- is all that is typicaly needed in order to "win."

The attorney-fee provision is a good one, for it adds addition pressure on the defendant to settle the case. Regardless of the P.O. Box, his attorney will have to make an appearance in court to defend the lawsuit -- or, if the individual is sued personally, he will have to appear personally if he does not chose to use an attorney. The corporation, however, may only appear through an attorney.

One would have to review the note itself to determine who the proper defendants are. If there is a legitimate way to name both the individual and the corporation, that is the recommended procedure, generally speaking. Even if the note is signed only by the corporation, it may be possible to bring the individual in under a theory known as "piercing the corporate veil," assuming the requisites for doing so are present. (It entails a review of a number of factors too detailed to go into here.)

Insofar as collection is concerned, after obtaining judgment, you (through your lawyer) could hold what is called a "citation proceeding," during which the individual would have to answer questions under oath as to the whereabouts of his assets and how certain financial endeavors are structured. Through that, it is possible to garnish bank accounts, place judgment liens on real property (such as his home), garnish wages, etc., etc.

Frequently, given the ultimate exposure, a defendant wants to settle matters of this sort and, if reasonable, it is something that plaintiffs frequently accept. Of course, this depends upon the circumstances of the particular case, for it may be worthwhile to go the whole distance in this circumstance.

-- Kenneth J. Ashman; www.AshmanLawOffices.com

The information provided by Ashman Law Offices, LLC (�ALO�) is for general educational purposes only. No attorney-client relationship is established by this communication and no privilege attaches to such communication. ALO is not taking and will not take any action on your behalf and will not be considered your attorney until both you and ALO have signed a written retention agreement. There are strict deadlines, called statutes of limitation, within which claims or lawsuits must be filed. Therefore, if you desire the services of an attorney and decide not to retain ALO on terms acceptable to ALO, you should immediately seek the services of another attorney.

Re: How to collect on a note

Yes, you can sue him. Many attorneys will take this on contingency, meaning you don't have to pay the attorneys' fees unless you win and then they usually take a third or more. There are ways to make him show the court what he is earning after you get a judgment. Then assets can be reached as well as wherever else he may have money. As far as who to sue, it depends on the note. Feel free to call for a free consultation!