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pursue collection or walk away May 2, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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pursue collection or walk away
May 2, 2018
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pursue collection or walk away
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    The most successful collection practices involve quick action by your in-house efforts and getting the collection matter to whatever professionals you use for collections.  If you have our 
Standard Form Agreements you can send the collection cases to K&K.  Contact our head paralegal Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com.  We will commence arbitration and work with your local counsel to confirm the arbitration award if necessary.  Once your subscriber fails to make payment in accordance with its historical payment history you need to take notice and then action.  Your internal communication should go out if 30 days past due.  The case should be sent to my office within 45 to 60 days overdue.  We will save the account if it's salvageable and get the case started within days of receiving it from your office.  
    A collection department is most successful when it has enough cases to balance out results and there is a firm policy of enforcement.  You can't judge success on one or even a few cases.  A practice of sending over your delinquent accounts should result in a positive cash flow and saving accounts as well.  But not every company is set up to pursue its collection cases.  
    What is the best course of action to take when your subscriber breaches your contract?  Maybe you've done everything right, bent over backwards to please this subscriber; maybe the subscriber is terminating with you for reasons entirely unrelated to your performance.  A better price; a friend called; your former employee called and offered to service them [that should wake you up].  Maybe they even owe you for past monitoring or service calls.  Maybe they are just deadbeats and are thumbing their nose at you.
    You have issues to deal with.  Emotional and economic, though they may be related.  As a level headed business person, which you should strive to be, you need to think with a clear mind and make decisions that will ultimately benefit your business and you.  Decisions based on emotion rarely end up well.  They get played out fast.  Clients that call me to "sue the bastard" immediately, no matter the merits or the cost of legal fees, because they are so worked up at the moment, typically calm down after paying a few months' invoices for legal fees or dealing with the consequences of litigation based on emotion rather than sound business judgment.
    I am not suggesting that you be a pin cushion or push over.  Rather that you take a moment to carefully assess the merits and risk / rewards of your actions.  Sometimes I ask clients to wait a few months before having me initiating litigation.  They usually forget about the case.
    Maybe you get two customers a year who really rub you the wrong way and breach the contract.  Sure you can sue them, but is it really worth going after someone who pays $20 RMR and has two years left on the contract?  If you have to spend one day in court you'll be miserable.  If you have to respond to a consumer complaint your cost will be more than the potential collection.  An adverse posting on social media could cost you more than the case you walk away from.
    There are plenty of reasons to pursue your subscribers for their breach of contract.  You don't want a reputation of roiling over.  Your subscribers may talk to each other and your competitors will start picking you apart like a vulture.  The balance of the contract and equipment value, if you're entitled to include it, may be a big enough number to make it worthwhile.  It's just as important to consider the customer because getting an award or judgment is the easy half of the battle, collecting is the hard part.  Debtor-creditor laws make it very difficult to collect from consumers.  At 
K&K the staff is trained to evaluate each case when it comes in.  We will let you know if we think you should limit your pursuit or walk away.  Try to take the advice, you'll be glad you did.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com