Triton Demand Letter or Lawsuit? 6 Differences That Matter

There is a big difference between receiving a Triton Demand Letter and a Triton Lawsuit. Yes, either one is bad to receive. But how each is handled can have a significant impact on the overall outcome and the amount you will pay, if any. The easiest way to tell which one you have is to look at the paperwork you received. If it came with any type of summons and says something to the effect of “appear by” then you are looking at a lawsuit. A demand letter is exactly what the name implies, a letter demanding payment. If you received a letter, then this is your chance to avoid being sued.

1. Who is behind it

Triton is a bonded commercial collector that works throughout the United States to recover merchant cash advance debts, according to its own website. They are a collection company, not a court or government agency. The federal FDCPA generally doesn’t cover business debts, only personal, family and household. A merchant cash advance, or a guarantee of one, is usually a business debt. For protection on a business debt, you’ve got to look at Florida’s law for commercial collection agencies. That one definitely covers business debts and the guarantors too.

2. What it can take

It can be upsetting to read a letter that comes right out and tells you somebody is about to take your money. But a letter can’t do that. After a New York judgment, the creditor’s lawyer can tell the bank to freeze up to twice the balance of the debt.

3. When the clock starts

A letter doesn’t start a court clock, it’s up to whoever is suing you to do that. A lawsuit is the “must respond” step. In a federal court, the defendant usually gets 21 days from service. In New York state court, the defendant is supposed to appear within 20 days if served in person, or else 30 days.

A letter can show up months or years before somebody goes to court. The lookback period for written contracts is generally six years in New York and five in Florida.

Having something filed against you is a long way from somebody coming to serve it. After a federal court filing, the plaintiff gets 90 days to serve or a court can dismiss it or set a new service period.

4. The cost of silence

One way a judgment can enter without a hearing is for you to ignore the paperwork. That’s not a great idea in any situation, but ignoring a federal claim for a fixed amount of money can be the worst of all. Once that happens, the court clerk enters the judgment with costs if the creditor files an affidavit showing the balance of the debt.

Once that judgment is on the books, it can keep growing. New York judgments generally carry 9% interest a year. While 9% of a few hundred dollars may not sound all that bad, a judgment in the five figures can rack up hundreds of dollars in interest in just a year. That’s part of the reason that settlements can be such a good idea.

5. Who speaks for you

The law in New York requires any corporation to appear in state courts only through an attorney, except for the commercial and small claims parts of the courts.

A lawyer can be a good idea even when you only have a demand letter. They can make sure your response to the claim doesn’t say anything about facts or figures that you may regret later. A lawyer can stop a client from writing an angry letter that might come back to haunt the person, and Rule 408 can shield settlement talks from being used in court.

If your employees write down what they know, those notes may be discoverable. That’s why you may be better off to let a lawyer do the legwork instead of relying on whatever the staff might know. The lawyer’s notes and interviews would normally have attorney-client privilege, which makes them “private.”

A creditor’s letter is more than just a rude note. It also can start a clock under a legal doctrine that usually gets called “duty to preserve evidence.” Once that starts, the business and the decision makers have to keep any documents or other evidence that might be relevant. That includes all the ways people keep their information these days: e-mail, phones, laptops, tablets, cloud storage, paper files, everything. Deleting or destroying them can bring a spoliation ruling.

6. The cheapest moment

Reaching a settlement at the letter stage may be the least expensive and most painless way to resolve the problem. By sending a letter, the creditor is saying it would rather deal with you than file. Once the person who wrote the letter files a lawsuit, the case can end up going back and forth for months or years, with both sides taking all kinds of positions. That makes it harder to get a settlement that everyone can live with, so look at the options while there are still some.

Before answering any letter, a good idea is to pick your goal and work toward it. If you’re about to sell your business, then the letter can be like a snake in the shed - you want it out of there because it will frighten potential buyers. A counterclaim can give leverage for a settlement, if you have one.

The cost of going to court can depend on which court it’s in. Sometimes the contract will choose the venue for you. And any fee clause in a contract can cut either way. A demand letter may also start the clock for you to give notice to any insurance company that could cover the claim. Make sure you check all the policies to see if they apply.

The last thing anybody wants is to get sued without warning. If a creditor wrote, it means you haven’t reached that point yet. You still have an opportunity to prepare for a lawsuit or even avoid it altogether.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.