Voluntary vs Involuntary Bankruptcy

Do you know the difference between voluntary and involuntary bankruptcy? 

Some bankruptcies are filed by creditors who gang up on the debtor when payments to those creditors are substantially delinquent. This is referred to as an “involuntary petition.” On the other hand, when the debtor files a petition for bankruptcy, that’s considered “voluntary.” Involuntary bankruptcy can occur under Chapters 7 and 11, but not under Chapter 13.

Learn more in our latest article.

Creditors Can Trust Michigan Collection Services

Since 1961, our top-rated lawyers have been dedicated to ethically pursuing the money you’re owed. With offices in Birmingham and Grand Rapids, we handle claims against debtors located in Michigan, even if you are located out of state or out of the country. To make use of our Michigan collection services, call (248) 645-2440 or submit a contact form for an effective resolution to your collection matters.

Bankruptcy: Chapters 7, 11, and 13

Are you familiar with the three most common types of bankruptcy?

The most common “chapters” (or types) in bankruptcy are Chapters 7, 11, and 13. A simple explanation of each chapter follows:

Chapter 7, straight liquidation: In a chapter 7 bankruptcy, the debtor’s assets are divided into two categories:

• Exempt: A debtor’s exempt assets are protected in whole or in part from being taken to pay creditors. For example, exemptions protect formal retirement accounts, Social Security benefits, home equity, and some personal property. The rules of exemption are a bit tricky – exemption can be capped at different levels based on state law, and eligibility for an exemption may also depend on how long the debtor has owned the asset.
• Nonexempt: The debtor’s nonexempt assets are sold, or liquidated, and the cash proceeds are given to the bankruptcy trustee for distribution to creditors (the trustee being an individual appointed by the court to oversee that process).

Chapter 11, business reorganization: Sometimes a business that’s in financial trouble will want to try to stay in business, rather than go through liquidation under Chapter 7. The bankruptcy court allows the company to stay in business and to remain in possession and control of its assets, while implementing a plan to repay creditors based on the debtor’s assets and income.

Chapter 13, wage earner bankruptcy: This form of bankruptcy is similar to a Chapter 11 reorganization, but is limited to wage earners or nonbusiness entities. An ordinary individual or married couple with regular income, whose unsecured debt isn’t outrageous, can file Chapter 13 and enter into a repayment plan very similar to the plan described for Chapter 11. 

Read more in our latest article. 

Creditors Can Trust Michigan Collection Services

Since 1961, our top-rated lawyers have been dedicated to ethically pursuing the money you’re owed. With offices in Birmingham and Grand Rapids, we handle claims against debtors located in Michigan, even if you are located out of state or out of the country. To make use of our Michigan collection services, call (248) 645-2440 or submit a contact form for an effective resolution to your collection matters.

Revoking an Offer Before Making a Contract

Do you know what truly makes a contract enforceable?

Whether you're extending credit, working with vendors, or closing a deal, understanding the fundamentals of a contract is essential to protecting your business.

In most cases, an offer can be withdrawn at any time before it is accepted. However, there are important exceptions:

• Option agreements: When the offeree pays to keep the offer open for a specified period 
• Legal requirements: Certain rules, such as those governing merchants, may require offers to remain open under specific conditions 

Understanding these nuances can help you avoid costly missteps.

Why This Matters for Your Business

Contracts are the backbone of any successful business relationship. When agreements are unclear, incomplete, or improperly formed, collecting what you're owed becomes much more difficult.

That’s where experienced legal guidance makes all the difference.

Read more in our latest article.

Looking for Collection Services in Michigan?

Since 1961, our firm has been committed to helping businesses recover outstanding balances efficiently and ethically. Whether you're in Michigan or operating from out of state, our services can support your collection efforts. Call 248-645-2440 or submit an online contact form to get started!

The Five Core Principles of Contracts

At its core, a valid contract is built on five key elements: offer, acceptance, consideration, mutual assent,
and legality. Let’s break down what each of these means—and why they matter.

1. Offer: The Starting Point

Every contract begins with an offer. This is a clear proposal made by one party (the offeror) to another (the offeree), expressing a willingness to enter into a binding agreement.

In today’s business environment, offers are often made through emails, digital platforms, or written proposals. Regardless of the format, the terms should be clear and specific to avoid confusion later.

2. Acceptance: Clear Agreement to Terms

Acceptance occurs when the offeree agrees to the terms of the offer. This can be done through a direct statement or through actions that clearly indicate agreement.

To avoid disputes, acceptance should always be clear and unambiguous. When possible, respond using the same method the offer was delivered—this helps establish a clean record of agreement.

Timing also matters. If the offer includes a deadline, acceptance must happen within that timeframe. If no deadline is given, the law allows a “reasonable time,” which can vary depending on the situation.

3. Consideration: Value for Value

A contract must involve an exchange of value—this is known as consideration.

In most business transactions, this means one party provides goods or services, and the other provides payment. Courts generally don’t evaluate whether the deal was “fair”—only that something of value was exchanged.

4. Mutual Assent: A Meeting of the Minds

Modern contract law focuses heavily on mutual assent, meaning both parties clearly understand and agree to the essential terms.

This is especially important in today’s fast-paced business world, where informal agreements, email chains, and ongoing relationships can blur the lines. Misunderstandings about key terms can lead to disputes—or even claims that no contract existed at all.

5. Legality: A Lawful Purpose

For a contract to be enforceable, its subject matter must be legal.

Laws and regulations can change, and agreements that were once valid may become unenforceable if they later violate new rules—particularly in highly regulated industries like technology, finance, or international trade.

Read more in our latest article.

Looking for Collection Services in Michigan?

Since 1961, our firm has been committed to helping businesses recover outstanding balances efficiently and ethically. Whether you're in Michigan or operating from out of state, our services can support your collection efforts. Call 248-645-2440 or submit an online contact form to get started! 

Staying Professional when Calling Debtors

What’s appropriate to say to a debtor when trying to collect?

When you’re trying to collect money, positive comments and professionalism can go a long way. Particularly for consumer debts, you need to be careful about legal restrictions on when and how you make contact. For example:

• Don’t say you’re going to sue the debtor if you don’t actually intend to file a lawsuit if you don’t receive payment. 
• Don’t talk to third parties about the debtor’s account.
• Don’t threaten or harass a debtor.
• Don’t try to collect debts directly from a debtor who has just filed bankruptcy (see last month’s article).
• Don’t threaten debtors with criminal charges if they don’t pay the debt.
• Don’t contact debtors directly if you know they’re represented by a lawyer in relation to the debt you’re collecting.

The FDCPA and other consumer laws limit the times of day for collections calls, limit the number of times a call may be placed, restrict the people who can be contacted about a debt, restrict what you can do if you’re asked not to call again, and the list goes on. Mistakes can get you sued.

Get more tips for calling debtors in our latest article.

Learn More from a Trusted Michigan Debt Collection Expert

Have questions about Michigan debt collection, or ready to file a claim? Reach out to the Mullers at (248) 645-2440 or submit a contact form here. If you need a second opinion, check out reviews from our clients!

Contacting Debtors via Phone

What’s the best way to get ahold of a debtor?

Although many technologies exist for instant communication, the telephone is still one of the best. A phone call gives you direct and instant communication with no gaps in time. If you reach the desired person on the other end, they can’t complain about missing messages or e-mails. 

Used properly, the telephone can get you paid in many instances where other forms of communication may not. It’s not just a matter of timing. The manner in which you represent yourself and your company can make a big difference in whether your collection call succeeds or fails.

Perfecting Your Telephone Voice

Develop a “telephone voice” that is a bit slower, lower, and louder than your normal voice. This isn’t to be exaggerated. Your telephone voice helps you pace the conversation while allowing your debtor to clearly hear every word you say.

Getting the Correct Person on the Line

The person who answers the phone may not be the person you want to speak with. Use your credit application or other information from your credit file to ask for a specific person who you know has the authority to pay you. When you’ve reached the point of making collection calls, you only want to speak with a person you know to have the actual authority to write a check and put it in the mail right now. After the right person is on the phone, give your name and the name of your business and make a specific request for money.

Get more tips for calling debtors in our latest article.

Learn More from a Trusted Michigan Debt Collection Expert

Have questions about Michigan debt collection, or ready to file a claim? Reach out to the Mullers at (248) 645-2440 or submit a contact form here. If you need a second opinion, check out reviews from our clients!

Avoid Violating Bankruptcy Law

How do you know if sending a statement is violating bankruptcy law?

If a debtor files for bankruptcy and the debt is being handled by the bankruptcy court or has been discharged, you may be in violation of the “automatic stay” (a court order that comes into immediate effect upon the filing of a bankruptcy action, forbidding collection activity against the debtor). You are in violation of the bankruptcy law if you continue to send notices to the debtor. Be sure to stop the notices, including any that are automatically generated by your computerized billing system. Your automated billing system should be set up to allow you to stop the issuance of any further statements to a customer.

After you write off a debt, you may report the amount to the IRS as a tax loss using form 1099-C. You must provide a copy of the 1099-C form to your debtor, and your debtor may be responsible to pay taxes on that amount as income. Your accounting department or financial professional can advise you about the timely filing of 1099 forms and steps to take if your debtor pays a debt that you’ve written off.

Need Help with Michigan Debt Collections?

If you’re struggling to collect debt from a customer, the Muller Law Firm can help execute the collection and make sure you’re compliant with the law. To get help with Michigan-based debt collections, call (248) 645-2440 or fill out a contact form here.

When to Stop Sending Statements

Do you know when to stop sending statements to customers?

Sometimes it makes sense to suspend sending statements to customers. If the customer is out of business or otherwise uncollectible, sending additional statements is often futile. For example, if the customer is out of business and mail is being returned, you can stop sending statements and mark the account as uncollectible. Save yourself the paper and postage. Billing an uncollectible account waste both time and money.

If the customer has been turned over for collection, sending statements may cause confusion. During the collection process, the attorney will make demands for payment using their own letters, forms, and statements. If you send statements of account, that may confuse the customer about how much they owe and where to make payments. After you’ve hired an attorney for an account, your collector will want to receive all payments on that account.

Need Help with Michigan Debt Collections?

If you’re struggling to collect debt from a customer, the Muller Law Firm can help execute the collection and make sure you’re compliant with the law. To get help with Michigan-based debt collections, call (248) 645-2440 or fill out a contact form here.

The Five Cs of Credit - Part 2

How do you decide whether to give a customer credit or not?

In our last blog, we talked about three out of the five Cs of credit: character, collateral, and capacity. Now we’ll discuss the final two Cs: capital and conditions.

Examining Capital

A company’s net worth is made up of capital that has been paid into it over the years, along with any that has been generated through profitable operations (“retained earnings”). Ideally, you can compare two or three financial statements next to each other to spot trends in net worth. You’re looking for your customer’s net worth to increase each year, meaning that capital is being put into the company—that the company is profitable and is keeping some of its earnings rather than paying them all out of shareholder as salary or dividends, or both.

Reacting to Conditions

An excellent practice to follow when extending credit is to consider the general conditions of your industry, as well as overall economic conditions. Although good customers may pay their bills timely even in poor economic conditions, when industry or general economic conditions take a downward turn you must monitor payment trends for even your best, most reliable customers.

When conditions are good, customers have lots of money and customer demand. Orders are high, and you’re willing to take some additional risk to maximize your profits, so more goods are shipped out on credit terms.

In difficult economic conditions, competition from other companies in your market affects how much risk you’re willing to take. If your goods or services are scarce or unique, you can more easily impose credit terms that better protect your business. The less unique your product, the more you must deal with market pressures that may force you to extend more credit than you’re really comfortable with.

Done Looking for Collection Companies in Michigan?

If you haven’t had luck with other Michigan collection companies, it’s time to partner up with Muller Law Firm! We provide collection services for business-to-business and business-to-client companies, specializing in pre-suit, post-suit, and post-judgment collection.

Fill out a contact form here, or give us a call at (248) 645-2440, to ask questions and figure out your next steps.

The Five Cs of Credit - Part 1

Have you heard of the five Cs of credit?

The five Cs of credit are character, collateral, capacity, capital, and conditions. In part 1 of this blog, we’ll be going over the first three. 

Assessing Character

Whether it’s an individual or a company, your customer exhibits a personality. From a credit prospective, you evaluate your customer’s integrity, particularly in terms of bill paying. Has this customer exhibited integrity in the past? If the customer says the check is in the mail, is it really?

Customers who lack character should be required to provide more proof that they’re worthy of credit. For example, you may require updated financial information every six months or every year or verify their status with outside credit reporting agencies every six months.

Evaluating Collateral

When you take a lien, you stake a claim to certain assets of your customer, and become their “secured creditor.” The property you take the lien against, such as inventory, equipment, or machinery is your collateral. If your customer stops paying its bills, you may pursue the assets that are subject to your lien in order to satisfy their debt.

After you’ve staked your claim to those assets, when your customer stops paying you can either take those items back with the cooperation of your customer or you can seek a court order to take the items back (a process referred to as “claim and delivery” or “foreclosure”) to minimize your losses.

Determining Capacity

“Capacity” is the sufficiency of cash flow to cover debt. The ability of a business to pay debt generally fluctuates depending on budgeting skills and the steady flow of enough cash to cover debts as they mature and become due. Unforeseen expenses can throw a monkey wrench into even the best-laid budgets, so the acid test for capacity is actually whether your customer can generate an adequate cash flow to pay its obligations even with fluctuations in the marketplace, sudden drops in orders from its customers, and similar unexpected difficulties. Part of the answer to this question may lie in the customer’s capacity and willingness to borrow money to supplement cash flow when the purse strings tighten up. What matters to you, though, is whether your company will receive payment even if your customer is having temporary cash flow concerns. 

Done Looking for Collection Companies in Michigan?

If you haven’t had luck with other Michigan collection companies, it’s time to partner up with Muller Law Firm! We provide collection services for business-to-business and business-to-client companies, specializing in pre-suit, post-suit, and post-judgment collection.

Fill out a contact form here, or give us a call at (248) 645-2440, to ask questions and figure out your next steps.

Your Debtor's Customers as an Asset

Are you struggling to get a debtor to pay?

Your debtor’s customers, or other people/entities who may owe money to the debtor, are an asset that can be used in the collection process. This includes: 

• Accounts receivable
• Tenants who may owe rent
• Insurance companies who may owe money for claims, such as any fire damage or flood losses
• State taxing authorities who may owe a tax refund (if permitted in your state; federal tax refunds are off limits)
• Purchasers of your debtor’s business who may still owe money on the purchase prior

When building a list of your debtor’s assets, include anything that appears to be a possible source of money. If you can identify enough assets to make you reasonably sure you’ll be able to collect the money owed to you, great! If not, consider scheduling a creditor’s examination. 

Stop the Struggle with a Michigan Debt Collection Law Firm

Do you need help with any of the steps above?

The lawyers at Muller, Muller, Richmond & Harms P.C. can help. Contact an expert Michigan debt collection law firm by calling (248) 645-2440 or submitting a contact form here.

Building a List of Your Debtor's Assets

Do you know how to build a list of your debtor’s assets?

When your debtor isn’t paying, you need to pursue his assets to collect your judgment. After you have a list of his assets, you can proceed with strong collection actions, including garnishment and “execution” (seizure and sale of a defendant’s assets). Start building your list by scouring your collections file for information you already have about the debtor, including:

• Home and business addresses
• Bank references
• Information about significant assets, such as real estate, vehicles, and watercraft
• Place of employment (if the debtor is an individual)

Have Questions? Call a Michigan Debt Collection Law Firm

Do you need help with any of the steps above?

The lawyers at Muller, Muller, Richmond & Harms P.C. can help. Contact an expert Michigan debt collection law firm by calling (248) 645-2440 or submitting a contact form here. 

Reviewing Credit with Clients

How often do you review credit information with your clients?

If a customer won’t take the time to fill out a credit application, and you choose to extend credit to the customer anyway, you can protect yourself. Make sure you interview that customer to obtain the information you need to determine creditworthiness and to use as a resource if the customer’s paying habits deteriorate. If you interview the customer by phone, keep a recording of the call (but be sure you can legally record the call under the laws of your state), or write the answers down on your standard credit application and add the completed document to the client’s credit file.

The information your customer provides is valuable when making credit determinations, but that information can be one-sided, as your customer may choose not to share unflattering information about themselves. Perhaps they conveniently forgot to mention tax liens against their assets, or maybe they “don’t remember” that they previously filed for bankruptcy protection. To balance out the possibility that some information may be false or exaggerated, obtain documentation from other sources for the purpose of verification, such as a credit report.

Problems often arise when you act without enough information to accurately assess creditworthiness. If you enforce your credit policies and get the documents you need now, you avoid problems later.

Experience Professional Collection Services in Michigan

Since 1961, our top-rated lawyers have been dedicated to ethically pursuing the money you’re owed. With offices in Birmingham and Grand Rapids, we handle claims against debtors located in Michigan, even if you are located out of state or out of the country. To protect your creditors’ rights, make use of our collection services in Michigan! Call (248) 645-2440 or submit a contact form for an effective resolution to your collection matters.

Keeping Notes on Credit Clients

Do you keep thorough notes on your credit customers?

You can help keep the odds in your favor by insisting on good documentation throughout the credit and collection process. Good documentation begins with a credit application, which is required before your first sale on credit to any customer.

Beyond requiring credit applications, you should periodically review credit information for all your customers. Depending on your industry and your history with the customer, you might review credit information every six months or once a year, but even with established customers, you don’t want to go beyond a two-year review schedule. In between reviews, update your customer’s credit data whenever you come across new relevant information. Have your customers complete a new credit application or make appropriate additions and deletions to the old one.

You can avoid a lot of difficulties with defaults if you monitor your clients for changes in their business and financial health. For example, if you find out that a customer’s business has new ownership, or that the owners have formed a new but similar company, it may be time to thoroughly recheck that customer. Sometimes your clients really don’t want you to find out about changes, and that’s a reason in and of itself to recheck them.

Get Results with Collection Services in Michigan

Since 1961, our top-rated lawyers have been dedicated to ethically pursuing the money you’re owed. With offices in Birmingham and Grand Rapids, we handle claims against debtors located in Michigan, even if you are located out of state or out of the country. To protect your creditors’ rights, make use of our collection services in Michigan! Call (248) 645-2440 or submit a contact form for an effective resolution to your collection matters.

Detouring Around the Disconnected Phone

What could possibly be worse than voicemail jail? A disconnected phone! In business, a disconnected phone is usually the kiss of death for your collections. It can be a major frustration, but the phone may not be the only way to communicate with your customer. Possible quick solutions include:

• Emailing – Look for an email address on the customer’s credit application, letterhead, purchase orders, or website.
• Faxing – Sometimes even when the phone isn’t working, the fax machine still works. A fax number may also appear on a letterhead, websites, or credit applications.
• Texting – Even if your debtor’s voice mailbox is full, your contact may still accept a text message.

Muller Law Firm Specializes in Debt Collections in Michigan

If you need help settling a debt owed to your business by a debtor in Michigan, contact an experienced attorney who handles debt collections in Michigan. 

Let our experts handle all the work for you! Fill out the information form on our “Contact Us” page, or give us a call at 248-645-2440, to ask questions and figure out your next steps. Don’t let the money owed to you go away – get started today! We look forward to hearing from you.

When to Visit Your Debtor in Person

Is your debtor hard to contact?

Are they avoiding your calls?

Has their phone been disconnected?

The next step to contacting your debtor is to show up at their doorstep. Visiting your debtor may result in meaningful face-to-face communication, but there are potential drawbacks:

• The debtor is gone – Sometimes the debtor’s address is no longer valid, and driving to the location is a waste of time. Still, if you’ve made the trip, check to see if the business has moved.  Go next door and see whether the neighboring house or business has any information that may help you find the debtor.
• Angry confrontations – Upon arrival, rather than getting paid, you may discover that the debtor prefers to engage you in a verbal or physical battle. Leave if the situation escalates.

Muller Law Firm Specializes in Debt Collections in Michigan

If you need help settling a debt owed to your business by a debtor in Michigan, contact an experienced attorney who handles debt collections in Michigan. 

Let our experts handle all the work for you! Fill out the information form on our “Contact Us” page, or give us a call at 248-645-2440, to ask questions and figure out your next steps. Don’t let the money owed to you go away – get started today! We look forward to hearing from you.

Speeding Up Slow Payers with a Phone Call

Have you already sent a collection letter to your debtor?

If the letter doesn’t result in payment, your next contact is just as polite but should be made by phone. Of all the ways to communicate with customers, the two most effective are still two of the oldest: face-to-face contact and by phone. In modern business, face-to-face contact is impractical or even impossible with many customers. Fortunately, phone calls can be almost as effective as face-to-face contact. Communicating by phone with the person who has authority to write you a check is an effective way to secure payment.

Learn more about speeding up payments!

Providing Collection Services in Michigan Since 1961

Have you had enough with your debtors?

Want to take your collection efforts to the next level?

Partner with Muller Law firm for prompt and relentless collection services in Michigan. Muller Law Firm can provide collection services for business to business and business to client companies, specializing in pre-suit, post-suit, and post-judgment collection.

Fill out the information form on our “Contact Us” page, or give us a call at 248-645-2440, to ask questions and figure out your next steps.

Starting the Collection Process with a Letter

Are your customers’ payments continually late?

Start with a collection letter! As soon as your customer’s payment habits start to slip, contact the customer in writing. At this stage, your letter is just a gentle reminder, consistent with maintaining good customer relations. After all, the customer may have simply forgotten to make the payment.

You may contact your customer by mail, fax, or email. Whichever communication type you use, don’t forget to keep a paper trail. Request delivery confirmation for emails, keep fax confirmation sheets, and consider using certified mail or receiving delivery confirmation if there’s any possibility of getting the age-old excuse: “I never got it.”

Learn the next step in the collection process on our website!

Providing Collection Services in Michigan Since 1961

Have you had enough with your debtors?

Want to take your collection efforts to the next level?

Partner with Muller Law Firm for prompt and relentless collection services in Michigan. Muller Law Firm can provide collection services for business to business and business to client companies, specializing in pre-suit, post-suit, and post-judgment collection.

Fill out the information form on our “Contact Us” page, or give us a call at 248-645-2440, to ask questions and figure out your next steps.

Why Preparedness Means Everything in Court

Are you taking your debtor to court?

Are you fully prepared?

Your preparation or lack thereof can influence whether you win the case. Here are two mistakes to avoid!

Not knowing who may represent your company – If your business is incorporated or if you intend to send an employee to represent your company in court, make sure the court’s rules permit you or the employee to appear without a lawyer. Determine in advance who may appear in court by asking the civil court clerk or by reviewing the small claims court pamphlet.

Failing to bring a key witness – If a witness has important testimony to share, bring the witness to court. Even if your court permits you to submit affidavits, a written statement is usually given little weight in deciding a case because there’s no opportunity for cross-examination or assessment of witness credibility. If you don’t produce an important witness in court, you send a signal to the judge that you don’t really care if you win or lose.

Learn more mistakes to avoid on our website!

Collection Services in Michigan

Since 1961, our top-rated lawyers have been dedicated to professionally and aggressively pursuing the money you’re owed in a straightforward, ethical manner. With offices in Birmingham and Grand Rapids, we handle claims against debtors located in Michigan, even if you are located out of state or out of the country.

To take advantage of our collection services in Michigan, contact us today!

Avoiding Common Mistakes During Litigation

Can’t get through to your debtor?

Have you decided to take legal action?

The most important thing you can do before litigation is prepare your case and gather all the information necessary. Common mistakes in small claims court include:

Expecting the judge to guide you – Don’t expect the judge to help you remember important facts, present your testimony and evidence, or tell you if you’ve forgotten to address a key issue. Some small claims judges are helpful, but some will let you sink or swim on your own.

Appearing without full documentation – If you find yourself telling the judge, “I left my file at home,” it probably means you’re going to lose the case.

Lacking conviction – The judge should sense that you believe in your case. Present your case in a manner that tells the judge, “I’m right, and I deserve the money the defendant owes me.”

Learn more litigation mistakes on our website!

Collection Services in Michigan

Since 1961, our top-rated lawyers have been dedicated to professionally and aggressively pursuing the money you’re owed in a straightforward, ethical manner. With offices in Birmingham and Grand Rapids, we handle claims against debtors located in Michigan, even if you are located out of state or out of the country.

To take advantage of our collection services in Michigan, contact us today!