Client Case Studies

Businesses Our Chicago Debt Collection Attorneys Represent

Case 1. Regional Bank

Our client is a regional community bank. It is frequently involved in acquiring the assets of insolvent banks being shut down by state and federal regulators. In these situations, the loans of the insolvent bank are acquired by our client, which becomes responsible for administering the loans and collecting the delinquent ones. The loans can be first mortgages, second mortgages, auto loans, credit card debt, and even signature loans. Our firm has the resources to handle all of these.

Frequently a single loan can require several different sets of lawyer skills. For example, what starts out as a foreclosure case in state court becomes a bankruptcy matter if the mortgagor files for Chapter 7 or Chapter 13 or Chapter 11. We can bring a motion to lift the automatic stay in bankruptcy, negotiate a reaffirmation, or negotiate a modification for our client. At the conclusion of a foreclosure, a deficiency judgment is often entered. We can seamlessly transition to the role of collection lawyers to collect the deficiency.

Normally, the employees of the defunct bank are no longer available and the records of the defunct bank are in disarray. Our lawyers work one-on-one directly with the loan officers of our client to overcome the problems posed by these obstacles.

Case 2. Auto Financer

Our client is a sub-prime auto finance company. Its borrowers, for the most part, have poor credit. Many have marginal employment. Many have less than stable living arrangements. Most have had their vehicles repossessed and sold, resulting in a deficiency balance. These are difficult collections requiring tenacious lawyers. We work closely with our client to make sure our cases are carefully documented to ensure our legal right to a judgment. We offer in-house skip tracing to locate our client's borrowers for service of summons. Our lawyers do not hesitate to take a case for a deficiency balance to trial if necessary. Finally, once a judgment is entered, we are willing to pursue collection for as long as is allowed by law.

Case 3. Auto Dealer

We represent a regional auto dealer with 20 some stores in the Chicago area. When we first met this client, there were over 60 files at one dealership with NSF checks or stop payment checks tendered as down payments for vehicles. Since the dealership was only the seller, not the finance company, it had no remaining security interest in the cars. So the customer had the vehicle, and the client had a worthless check. Since our client did not have in-house collection capabilities of any kind, we immediately undertook to locate and contact the customers. We were able to obtain payment from many just by informing them we had been assigned to collect the debt. Those we determined to be viable for collection we sued. And in the process we kept the client informed as to the process and our progress in collecting their money. We now represent this auto dealer on an ongoing basis.

Case 4. Credit Union

Our client is a local credit union. It provides financing for several car dealerships. The customer signs a retail installment contract with the dealer, who in turn assigns the contract to the credit union. The credit union acquires a lien on the automobile and collects the balance due on the contract. In theory, if the customer defaults the retail installment contract gives the lienholder the right to repossess and to sell the vehicle. When this happens, the sale does not pay the full balance due we are able to sue for the balance remaining. In many instances, however, customers will hide vehicles to prevent repossession.

Our lawyers in these situations can file a legal proceeding called a detinue. Boiled down this is a proceeding where the lienholder demonstrates to the court that it has a lien, that the buyer is in default and therefore the credit union/lender/lienholder has a right to possession of the collateral, and that the buyer refuses to surrender it. It asks the court to issue an order to the defendant to surrender the vehicle. If the defendant does not, the court has the power to hold the defendant in contempt of court. This is usually sufficient to get the car back. This same procedure is also used to recover other types of personal property such as trucks or construction equipment.

Case 5. National Bank

Our client is a large U.S. bank, with branches throughout the Midwest, providing all manner of lending and financial services. Over the last decade, they have merged with and/or acquired a number of banks and finance companies and most recently, purchased the transportation portfolio from a multi-national conglomerate (seeking to shrink its financial business and shake off its "too big to fail" status). Many of the referrals we receive from this client involve delinquent commercial loans involving multiple units of collateral, mainly semi tractors and trailers ("rolling stock").

Our initial efforts focus on determining the financial status of the obligor and seeking to cure the default. If the obligor is unwilling or unable, we commence litigation to recover the collateral (detinue or replevin) and to seek money damages for breach of contract. Often the collateral provides the only source of revenue for the obligor, and they are understandably reluctant to surrender it. By the same token, often our collateral is the only valuable asset the obligor possesses, so its recovery becomes imperative in order to mitigate our client's loss. With our experience and the tools we have at our disposal, we have enjoyed a high degree of success in putting our client in a position to minimize its exposure.

Case 6. Truck Lenders

We also provide legal services for trucking finance and lender clients, including:

• A commercial tractor and trailer financer.
• A tow truck financer for small owner/operators.
• A financial lending arm of a closely-held corporate enterprise that operates several professional trucking dealerships and finances fleets of new tractors and trailers.
• A sub-prime lender for first-time buyers of pre-owned commercial trucks.