Collection Procedure
The Firms' procedure for collecting unsecured debt is as follows:

Initial Processing of Claims
The file is received and reviewed by Attorney Mauro. A file is then opened on the debtor and the case name is entered into JST by the Firm's non-attorney assistants, either Hugh G. Johnson, Anthony Mardakis or Vincent Close. The Firm then calculates the amount due from the debtor to include all applicable administrative costs, pre-judgment interest, and any attorney fees, surcharges or costs allowable for the debt.

Demand Letter
In order to ascertain and confirm the address of the debtor for service of process and, if possible, to create a relationship with the debtor that will facilitate payment of the debt, a single demand letter is sent to the debtor immediately. This letter includes a request to the Postmaster for Address Correction, giving us information on all bad addresses. The letter also complies in every respect with the Fair Debt Collection Act.

Effect of the Demand Letter
The demand letter will produce one of the following results:

No response from the debtor; the initiation of a law suit. This is the most common result. Suit is immediately initiated, using the address provided, if it is correct. The Summons and Complaint are issued by the Court and forwarded to the Firm's regular process servers for service of process.

The letter is returned as undeliverable. This occurs for approximately fifteen percent (15%) of the files. The Firm then cycles the file through its skip tracing procedures.

The debtor responds with an offer to pay or to compromise. This happens rarely in response to a demand letter. But if the response is full payment of the amount demanded, the Firm takes the payment and no further action is taken. The file is closed and JST so notified. If an offer to compromise the claim is made, the offer is forwarded to the Client. We discuss the Firm philosophy on settlement and installment repayment plans below.

Initiation of the Law Suit
If a law suit is required, the Firm prepares and files a debt collection action against the debtor in the Superior Court for the District of Columbia or appropriate Court in Maryland. The Firm has retained reliable process servers in the District of Columbia and Maryland to accomplish service of process. The Firm has worked with these companies for a number of years achieving significant success and is not aware of any case in which service of process has been challenged by a debtor or his or her counsel. Thus, the Firm is assured of the reliability of this important part of the system.

In-Court Proceedings
The cases are then scheduled on the Court's docket and proceed to judgment, or settlement. The Firm believes that its approach to these cases, which is discussed in more detail in connection with the Firm's philosophy on settlement and installment repayment below, has won the confidence of the Courts and is an important reason for the smooth handling of these cases and their relatively swift resolution after they are filed.

Results of the Litigation
The litigation in the vast majority of the cases in which service of process has been achieved will be resolved in one of the following ways:

The entry of a Default Judgment. This is always for the entire amount of the claim. The Firm does not seek a default judgment for anything less than the entire amount of the claim.

The entry of a Consent Judgment requiring installment payments. This too is always for the full amount of the claim. The only variable is the period of time in which installment payments are made. The Firm determines such repayment periods in consultation with the Client and after review of the confidential Financial Disclosure Statement submitted by the Debtor to the Firm.

Inability to serve the debtor / defendant with process. This occurs in a small percentage of the cases filed and usually results from either a bad address for the debtor or the debtor's affirmative attempts to avoid service. If the address is bad and there are no further leads, the case is handled by the Firm's skip tracing process. For each case in which the debtor is avoiding service of process, the situation is handled on an ad hoc basis. For example, attempts might be made to serve the debtor at his or her place of employment or through the services of a special investigator. If all of these attempts fail, the case will remain inactive on the court's docket for about a year. In the interim we will continue the skip tracing process.

The matter is tried to judgment. This is rare. However, on some occasions in the past the Firm has prepared a case for trial, including arranging for and preparing witnesses.

At each of the steps noted above, JST is updated with the most current information on the case.

Post Judgment Practice
After receipt of a judgment, whether by consent or through litigation, the Firm's data base and the JST program controls further contact with the debtor. A Bill of Costs is submitted. In Maryland the Court allows recovery of the filing fee plus $30.00 for service of process. The following procedures are then followed:

Payments Are Monitored. The Firm monitors settlement or installment payments by maintaining a list generated by JST of all installment pay cases. The list is produced weekly. If a debtor is late in his or her payments, telephone or written contact is made. If such contacts do not result in a resumption of payments, the debtor is subpoenaed to appear in court for an ex parte examination of assets. In every possible case, the debtor's bank account is attached through a Motion for Bank Attachment or the debtor's employment income garnished through a Motion for Writ of Garnishment. The Firm encourages debtors to avoid these radical steps by voluntary resumption of payments and is often successful in these efforts.

Execution on Judgments with No Installment Pay Agreement. (1) If the Firm has current information on the debtor's employment or banking arrangements, a Motion for Writ of Garnishment or for Bank Attachment is made. If these do not result in full payment, post judgment interrogatories are proffered and the debtor is subpoenaed to appear in court for ex parte examination of assets. At such examination an agreement for installment payments is usually made with the debtor and the debtor's name added to the Firm's list of installment pay cases. It has been the Firm's experience that debtors who are forced to appear in court often fail to honor the commitments they make. So for these debtors, the process is repeated as often as is necessary to collect the debt. In those cases where the debtor is judgment - proof (usually because the debtor is unemployed or receiving some type of government assistance), the Firm takes a "wait and see" approach because the Firm is sensitive to the possibility of bankruptcy. The Firm maintains a tickler system to renew the process of ex parte examination (usually after six months) for such cases. (2) In order to monitor these cases, the Firm produces a list of these cases through JST at least on a monthly basis. The list is reviewed by the Firm's legal assistants who are familiar with all of the outstanding cases on the Firm's docket. It is the Firm's practice to maintain contact with the debtors on its docket.

File Closed. After the debt is satisfied, the Firm files a Praecipe or Line of Satisfaction with the Court, closes the Firm's file, notifies the client of the closed status, and sends the file back to the Client.

The Firm's Collection Strategy
The Firm believes that its strategy for handling debt collection is successful and effective. The strategy is based on four simple rules which the Firm has developed from experience. First, maintain regular contact with the debtor. Second, be clear and firm with the debtor but not discourteous or threatening. In this regard, if an indication is made to the debtor that some enforcement action will be made against the debtor, the action must be taken and in a timely manner. Third, know when to work with the debtor and when to resort to legal measures (such as obtaining a default judgment, a wage garnishment or bank attachment). This knowledge is based on the Firm's experience and is an important part of the strategy. Fourth, be sensitive to the debtor's ability to have the debt discharged in bankruptcy. This strategy is inherently in compliance with the Fair Debt Collection Procedures Act. Of course, the Firm strictly adheres to the Act in each step of the process.

The Firm's Philosophy Regarding Installment Repayment Plans
The Firm's approach to settlement is essentially set out above and is summarized as follows: (1) The Firm does not compromise on the amount of a debt when installment payments are to be made or in which a default judgment is to be obtained. (2) The Firm will compromise a claim where the debtor is willing to make a lump sum payment. No lump sum payment for less than the full amount of the claim is taken without the prior approval of the Client. The final decision is the Client's. (3) The Firm will not settle a case in order to avoid spending time in litigation or trial. The Firm would just as soon litigate the case than to settle it if the Firm believes that the settlement does not serve the interest of the Client well. A compromise will only be recommended if the Firm believes that there is nothing more to be gotten from the debtor. (4) The precise length of time of an installment arrangement depends on the financial condition of the debtor, which is ascertained from the debtor before an agreement is signed. Again, the final decision is the Client's. (6) Most of the Firm's cases are settled on an installment pay basis. The application of this philosophy is based on the Firm's general expertise as well on its specific experience in collecting these debts in the District of Columbia and Maryland. Since interest at the judgment rate (in Maryland – 10%) continues to run on any case in which installment payments are being made, the Firm believes that its settlement philosophy maximizes the Client's return on these cases and minimizes the threat of a bankruptcy discharge.

The Firm's Skip Tracing Process
The Firm has developed a regular procedure for skip tracing as follows:
  1. the initial demand letter includes an Address Correction request to the Postmaster.
  2. If this does not produce the correct address and mail to the debtor remains undeliverable, the Firm uses its subscription to Equifax to run a credit report and Accurint to obtain social security numbers, asset and address information. A request is made to the local post office of the debtor for a confirmation that the debtor receives his or her mail at the address given.
  3. The Firm has found that the most effective way of learning about and at the same time finding a debtor is to obtain a copy of the debtor's credit history. The Firm subscribes to Equifax for this purpose. This process results in the location of the great majority of the Firm's debtors.
  4. Those files in which the debtor cannot be found after repeated attempts are returned to the Client. Of course, the procedure may be modified on a case by case basis.
Mauro Law Offices, P.C.
1776 K Street N.W. Suite 840
Washington, D.C. 20006
Phone: (202) 452-9865   Fax: (202) 452-0092

© 2009 Mauro Law Offices, P.C.
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