Collection Cases in Michigan

I just finished a trial in the Livonia District Court on a business v. business collection matter, and thought I would provide some insight to small business owners on avoiding collections or at least doing them the right way.

I have been in the business of legal collection of debt, on both sides, for over 12 years. These are some tips for the business owner:

1) Always get the agreement/contract in writing.
2) See number 1.

Seriously, most people understand the idea that things must be "in writing" to be legal, which is not always the case. The trial I finished recently had no "written" contract, but we had lots of e-mails, phone messages and admissions from the Defendant that there was a contract, and what the terms were.

Maybe if we had the contract in writing, we wouldn't have had to go to trial, but it was a victory nevertheless.

A party who seeks to enforce a contract needs relevant evidence that there was a contract, what the terms were, and how it was breached by the other party and not themselves.

A solid written contract which clearly sets forth the terms and conditions is the best start. It is also important to think about collection of a debt before it is even due. This would be a provision in a contract which calls for interest in the event the debt becomes overdue, and most importantly for us attorneys: an attorney fee provision if the debt goes to court for enforcement. Because too often I represent parties which do not have an attorney fee provision, and they end up "eating" my fees as a cost of doing business, because generally speaking, Michigan law provides each side to pay their own attorney fees.

So, to be made whole on collecting a debt, it is best to protect yourself in advance with interest and attorney fee provisions.

If you have further questions or want more information about collections law in Michigan, visit my website at www.kliszlaw.com or call me toll free at (866)770-7782 or locally at (313)402-0853. -Tim