Past Due

JPMorgan Chase is a common creditor that we encounter when defending consumers and businesses in debt collection and judgment enforcement matters. The majority of cases are related to personal credit card defaults. These collection cases and lawsuits are primarily handled by Rubin and Rothman, a law firm that focuses on consumer debt collection matters. However, when dealing with business credit cards, lines of credit and loans, Chase will often retain Bonchonsky and Zaino, a litigation law firm, to pursue collection, litigation and or judgment enforcement. These business loans and lines of credit usually consist of significantly higher sums of money than consumer debt matters that may be six figures or higher in value. Although the procedure for resolving these cases is virtually the same as on the smaller Chase matters, there are some important differences besides the amount pursued. First, the same type of consumer protections that apply toward consumer lawsuits will not apply for business lawsuits. It has been our experience that courts hold businesses to a higher standard than they do consumers. Courts believe that any business involved in business-to-business transactions should understand the risks or retain an attorney to review the risks when entering into a contract or agreement. Practically speaking this usually means that the judge is not going to give the business, defendant much of a break or be as lenient as they would in a consumer case.

In litigation however, the process is identical. An answer with defenses must be submitted before JPMorgan can move for a default judgment. This keeps the burden on the plaintiff to prove their case and keeps the leverage on the defendant’s side. If a default judgment is obtained due to improper or poor service or if there is a reasonable excuse for the default, then an order to show cause must be filed to vacate the default judgment as quickly as possible. This re-opens the case and puts the business back into a position to defend themselves. The case then continues through the discovery process and proceeds to motions for summary judgment and or trial if it gets that far. The critical part is whether JPMorgan Chase will be able produce business records along with someone who has personal knowledge of such business records so that they can be entered into evidence. Generally, original creditors like JPMorgan Chase possess such evidence and are able to have it entered unlike debt-buyers who have a more difficult time producing such evidence. For this reason, it often makes sense to negotiate a settlement in these matters which may significantly reduce the overall balance and prevent additional fees and interest from accruing if a judgment is obtained.

The good news is that banks like JPMorgan Chase are usually happy to negotiate settlements in these cases through Bonchonsky and Zaino or Rubin and Rothman. A settlement may reduce the balance by 30%-75% from our experience. This depends on legal factors as well as the financial health of the business. Paying in lump sum is also a major factor in reducing the balance significantly but also obtaining an interest free payment arrangement on the settlement balance is something that we usually obtain in these higher sum business debt matters. In any case, litigating and resolving these business debt matters against regular banks like JPMorgan Chase is significantly easier and more standard than resolving more aggressive business debt matters such as Merchant Cash Advances.

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