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Illinois commercial debt collection attorney

As someone from a credit union, bank, or other financial institution, among other organizations, who deal with debt collection activities every day, sooner or later, you will have to deal with Bitcoin and other cryptocurrencies, if you have not already and whether you want to or not. This is because, over the last several years, cryptocurrency has made tremendous strides in the following ways:

  • Multibillion-dollar investors from leading companies have been investing in cryptocurrencies like Bitcoin to get ahead of the trend, increasing its value and popularity amongst investors.

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Chicago debt collection attorneysWith the ways that technology has changed consumer behavior, lenders have been rethinking their approach to debt collection. A room full of people calling delinquent debtors may no longer be the most efficient or effective way to collect debts. Instead, lenders such as banks are using communication technology to more quickly reach clients with a tone that sounds and feels less aggressive.

Efficient debt collection may become a necessity given the current financial status of households and businesses throughout the United States. Many lenders have allowed borrowers to defer payments or use forbearance because of the financial hardship they are suffering during the COVID-19 pandemic. When the deferrals have ended, however, lenders may need to ramp up their debt collection efforts.

New Ways to Facilitate Collections

There are three main ways that banks are using technology to help with debt collection:

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 Four Ways Banks Can Improve Their Debt Collection ProcessCommon creditors such as banks will usually explore various means of collecting debts before they choose litigation. Filing a lawsuit for every debt collection dispute would be costly and hurt their relationship with potentially valuable clients. There are many cases that banks can resolve internally by working with the debtor. However, an inefficient debt collection process may ultimately be a waste of resources because of its low success rate. Adjusting your debt collection strategy may help you more effectively recover outstanding debts and understand when litigation is necessary:

  1. Collect and Verify Client Information: It is difficult to start your debt collection process if you cannot find the client. When entering the debt agreement, you should ask the client for personal information, such as their address, phone number, place of work, driver’s license, social security number, and personal references. If you are unable to reach the client with this information, check with government agencies and other third parties to see if your information is out-of-date.
  2. Be Proactive and Clear in Communication: Do not give your clients a reason to claim that they were unaware that they owed the debt. Send a message after the first time they miss a payment and follow up if they continue to not pay. Try to contact them in multiple ways until you get a response. Be specific about what they owe, when it is due, the consequences of not paying and how they can pay you.
  3. Establish Phases of the Collection Process: Debt collection starts with soft inquiries about the unpaid debt but will become more aggressive the longer that the client does not pay. You need guidelines that will determine when you reach a new phase of the debt collection process, such as sending a final notice or using litigation. You can measure phases by the amount of money owed, the duration of the case, and the client’s response.
  4. Use Different Approaches Depending on the Client: Automated debt collection messages may work fine with basic clients, but your most valuable clients need a more personalized touch. You need someone to contact them directly to figure out why they are late on the payment and to find ways that you can solve the issue while preserving your business relationship.

Contact a Chicago Debt Collection Attorney

Banks lend money to a variety of consumer and business clients, which can make collecting debts more complicated. You need an experienced Illinois debt collection lawyer at Walinski & Associates, P.C., who can advise you on how to approach your most difficult and important cases. To schedule a consultation, call 312-704-0771.

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Banker's Options When Debtor Files for BankruptcyA bank must pause its efforts to collect a debt or foreclose on a property if the debtor files for bankruptcy. The automatic stay is one of the most powerful tools that a debtor has during bankruptcy. The stay expires after 30 days, but the debtor can file for an extension. As a bank, your priority when a client files for bankruptcy is to protect yourself and try to recuperate the debts owed to you. There are several actions you should consider.

Freezing Account

The automatic stay prevents you from withdrawing money from a bankruptcy filer’s account in order to offset debt. However, you can freeze your client's bank account in order to:

  • Protect the money from a bankruptcy trustee; or
  • Hold onto the money until you are able to offset it.

The trustee may order you to release the portion of the bank account that will be exempt from the bankruptcy. It may take weeks for the trustee to make this determination, which buys you time to pursue legal action.

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Bank of America Stuck in Debt Collection Dispute with ClientIllinois trial and appellate courts have been going back and forth on a debt collection case between Bank of America and a small business owner. Bank of America is suing the former owner of All About Drapes for the remaining value of an unpaid loan, plus interest and legal fees. The business owner counters that he was induced into signing the loan agreement because the bank falsely claimed that his previous line of credit was expiring. The trial court has twice ruled in favor of Bank of America in a summary judgment, but the appellate court overturned that decision each time.

Case Details

The business owner had originally created an open-ended line of credit with LaSalle Bank. He would borrow money to help him through the winter months — when his business was slow —  and paid the bank back at a two percent interest rate. Bank of America purchased LaSalle Bank in 2008, and the business owner began seeing an August 2009 maturity date on his bills. The owner explained to multiple employees at the bank that his line of credit did not have a maturity date. The bank insisted that:

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