This Is Why You File Liens

Very often a new construction client will come to see us and have a terrible problem collecting debts. Inevitably we discover that they have been very lax in filing liens. The lien laws in this state are very friendly to contractors, if those contractors follow the law.  If the fail to do so, the lien laws are well, not very kind to the contractors.

So when a new one comes to see us we always insist on beginning a process for filing liens. Like everything else in the collections business, you need an aggressive plan, one that meets deadlines and makes it clear to the debtor that you are serious about following through with the collection process. Following the procedures that are outlined in statute gives you the greatest advantage and causes owners of projects to put you at the top of their list, even if you are a sub-contractor.

One of our contractor clients came to us with significant collection issues and we implemented a plan of sending out notices and liens.  In less than a year the client was only sending us the notices and the lien work on a sporadic basis and when we called to make sure everything was going well she told us that "yeah, everybody is paying me now that they know I have you guys to file a lien." We worked ourselves out of a job, but that is how the lien statutes are supposed to work.

Another contractor client came to us with significant collection issues and was not filing any liens when they first stepped in our office.  We were near a deadline and immediately sent out a number of liens.  To the amazement of the client, people started paying their bills.  One was paid within a week. 

You can file liens (the correct way- in accordance with the statute) or you can have collections issues. 

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Email:  Darrell W. Cook

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