As many of our valued partners know, American Financial Management is a third-generation family owned business that specializes in commercial (b2b) collections. With our core values of Honesty, Empowerment, AFM Client Focus, Respect, and Teamwork, American Financial Management has been a leader of the commercial collection industry since 1964. It is with immense pleasure and excitement that we announce the start of a new chapter in our corporate history with the appointment of our new President and CEO, Alexander Rosen. As an Attorney with over 10 years of industry experience, a client-focused approach to collections, and an innovative, growth-driven mindset, Alex brings a unique set of skills, perspectives, and initiatives to lead American Financial Management into the future. Under Alex's leadership we will further hone our strategic direction, grow and develop our organization, strengthen our valued client partnerships, and build new and robust relationships. As always, American Financial Management remains committed to providing our clients with exceptional service and working tirelessly to achieve outstanding recovery results. We look forward to working with our clients toward a bright future and continued success.

The decision to file lawsuit against a former client is never easy.  Credit managers consider many factors, including the account balance and likelihood of recovery, the prospects of a future business relationship, the impact to the creditor’s reputation in the marketplace, and not least of all, the costs associated with legal actions.  Too often, a major contributor to inflated legal costs are the archaic regulations dictating how and when to serve a complaint and summons.  A new Texas Supreme Court Order is poised to modernize this process and significantly reduce the time and expense of service and, thus, securing a judgment. On August 21, 2020, the Texas Supreme Court announced an amendment to the state’s Rules of Civil Procedure that authorizes civil courts to allow service of complaints, citations, and subpoenas via electronic means, including Twitter, Facebook, and/or email.  The move is in response to a general mandate from Texas legislature to fully incorporate technological advances into the state’s bureaucratic and judicial processes.  Although a handful of federal courts occasionally permitted service of process via social media as far back as 2016, such cases are far from the norm.   Most jurisdictions dictate that a defendant is properly served when a complaint is personally handed to a the individual or, in the case of corporate entities, to a registered agent.  In some cases, local rules also require that service of process occur at the specific registered agent address noted on a company’s most recent state franchise filing.  In instances where registered agents purposefully dodge service or a company’s annual franchise filings are not up to date, creditors are left with few options.  In theory, most jurisdictions have provision for alternative service, including service by publication.   To serve by publication, a creditor must publish an official notification of a lawsuit in a daily print newspaper that circulates in the county where the debtor resides or where the debtor business operates.  Jurisdictions require Plaintiffs to publish the legal notice for several weeks, and this can easily cost hundreds of dollars.  Nevertheless, as print newspapers become little more than relics of a bygone era, [...]

As the ongoing COVID-19 pandemic creates upheaval in the lives of individuals and business, attention has been focused largely on the Coronavirus Aid, Relief and Economic Stimulus Act (CARES Act) and its refunding and enlargement. However, even before most businesses rushed to banks, flooding the Small Business Administration with Paycheck Protection and Emergency Disaster Relief loan applications, Congress passed the Small Business Reorganization Act of 2019 (SBRA) with little fanfare. The SBRA amended the existing Chapter 11 Bankruptcy Code to include a new Subchapter 5, which is geared to small businesses. Background and Eligibility: Although the SBRA seems tailor-made for the current economic climate, House Republicans actually introduced the bill in June 2019. The bill was largely a response to small businesses owners’ growing concerns about the massive costs and complexities of a traditional Chapter 11 Bankruptcy. The law went into effect on February 19, 2020. At inception, to qualify for Subchapter 5, a business’s debts had to fall below the $2,725,625.00 threshold. However, the CARES Act temporarily increased the maximum debt threshold to $7,500,000 for cases filed on or before March 27, 2021. Importantly, both debt caps exclude debts owed to insiders and affiliates. Key Differences: No Creditors’ Committee – In the past, a business was forced to undertake the long and complicated process of a traditional Chapter 11 reorganization if they desired to continue operations post-bankruptcy. The most daunting part of the reorganization process is usually the submission and approval of the actual reorganization plan. Specifically, the debtor is often in a seemingly endless battle with creditors, who are organized in a Creditors’ Committee, to approve the plan. The approval process alone can take several months to a year, with any secured creditor or major unsecured creditor having the power to veto the reorganization plan. In contrast, Subchapter 5 eliminates the Creditors’ Committee. Instead, the Bankruptcy Court appoints a Trustee to oversee the process of reviewing the debtor’s financial schedules and proposed reorganization plan. Further, a Subchapter 5 attempts to expedite and simplify the reorganization plan process by requiring the debtor to submit a reorganization plan within 90 [...]