Most people pay their bills. And most businesses are reputable. These two facts allow business owners to feel comfortable doing business with other companies. Company A sends Company B an invoice and feels a certain security in the system.

So why, then, do attorneys like Allyson Cofran exist? Cofran, who works at Stark & Stark’s Lawrenceville office, is an expert in bankruptcy and creditors’ rights. She exists because once in a while a debtor decides he will not pay a bill, and it’s up to attorneys such as Cofran to see that they do.

Hiring an attorney and going to court is an unfortunate fact of business life, but even when you have been cheated there’s no guarantee the court will see it your way. Cofran will explain how business owners can increase their chances of getting the money they are owed when she presents “Strategies for Improving Small Business Cash Flow” on Thursday, April 25, at 6 p.m. at Stark & Stark’s office at 993 Lenox Drive. The event, which is part of the firm’s seminar series on various legal issues hosted by women attorneys, is free. Visit www.stark-stark.com.

Born to a pair of teachers in Delaware, Cofran earned her bachelor’s from the University of Delaware in 1995 and worked as a paralegal for nine years in the state. Much of the firm’s business revolved around collections and bankruptcy. At night she went to law school at Widener, where she earned her J.D. in 2004. She moved to New Jersey when she accepted a clerk’s position in Burlington County. Later she worked for a firm that merged with Stark & Stark.

Cofran has mainly worked in collections and bankruptcy her entire professional life, and she has seen many business owners make the same mistakes when it comes to dealing with debtors and collections. She is aware that some people are intimidated by money talk and asking to get paid. But then, remember why she does what she does: “The court system is there for a reason,” she says.

Yes, it costs money to file a suit and see a case through — as much as $200 to file a complaint and who knows how many more dollars to file motions. Even without an attorney, getting your money could cost you a lot. There is, however, one way to avoid paying everything out of pocket, and that is to factor it all in up front.

Provide for the recovery of fees. When you set up a contract with another business, it is best to enter it as if it were a prenuptial agreement and prepare for any contingency. While there are no guarantees in a court case, Cofran says, you stand a much better chance of getting money to cover court and attorneys’ fees if those fees are stated as a penalty for defaulting on the contract.

It’s all at the court’s discretion, she says, and money for fees is usually limited to an amount the court deems reasonable, but judges tend to look more favorably when someone has agreed to pay fees in a contract.

Personal guaranty. One of the best things business owners can do when working with smaller companies is get a personal guaranty from that business’s owner, Cofran says. A personal guaranty is exactly what it sounds like — a pledge from a person that a balance will get paid. This is critical, Cofran says, because businesses can use the system to skirt having to pay.

A small businesses, such as an LLC, can close down and the owners can reopen elsewhere, leaving a messy trail of shrugged shoulders and paperwork that goes nowhere. Often there are so many names attached to companies, it’s hard to know who to even go after when a bill comes due.

But consider this: “People have a bigger stake when their name is on it,” Cofran says. If you can get one of the business’ owners or partners to personally guarantee that he will pay any outstanding debt, there are many more avenues you can pursue to get your money, she says. This includes bank accounts, assets, and real property.

Collecting is less of a problem when dealing with larger, more established businesses that care about their reputations, Cofran says. And though most small businesses are on the level, she says, it’s easier for small companies to pick up and move and to close accounts. People, however, are less likely to close their personal accounts or sell their property just to get out of paying what they owe.

Maintain accurate records. One thing that surprises Cofran is how often business owners keep poor financial records. They don’t keep track of who owes what, what they owe for, or when payment is due. “In a court, you have to be able to prove what you’re owed,” she says. Judges, after all, will not award settlements based on what you think you’re entitled to. The more of a record you can show in a case, the more likely the judge will take your side.

Software doesn’t matter so much as just covering your bases, Cofran says. Her clients use scads of different record-keeping programs, but what they have in common is they all know the details of their accounts.

Know your debtor. You understand that it’s good practice to know a little about the company you’re interviewing with for a job. That same do-your-homework philosophy works equally well when it comes to debt. Know who you are doing business with. In certain cases — depending on the nature of your business — businesses are allowed to run credit checks. Normally, however, it’s just a matter of getting to know a little about the business before you do business.

Once a case is underway attorneys can of course look more deeply into a debtor’s circumstances, Cofran says. But the more you know going in the less likely you will be to end up waiting for a judgment.

Know the law. The Fair Debt Collection Act took great strides toward ending harassing calls from bullying debt collection agents, but debt collection is a little more complicated than just menacing someone. Collectors need to identify themselves and why they’re calling, but even that has its gray areas, Cofran says.

Let’s say you call and get an answering machine. The Fair Debt Collection Act requires that collectors state who they are and why they’re calling, but what if that message gets played by someone not connected to the situation? Privacy issues crop up and muddy the whole thing, Cofran says. It makes the collector’s job a little more “prickly.”

Under all of this, Cofran has one foolproof solution to avoiding being harassed for payment of any kind. “Just pay your bills,” she says.

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