A collection law firm is an ethical team that helps you handle customers who don’t pay their bills. You need the law firm because sometimes things don’t go as smoothly as expected.
When confronted with such circumstances, you have a few options on how to proceed. Sending a letter asking for payment, enlisting the help of a collection agency, or hiring a collection attorney are all viable options.
Due to the difficulty of debt collection, many company owners choose to outsource it to a third-party debt collector rather than manage the process themselves.
Using a collection agency or an attorney to collect your debts is easier, and it may also speed up the process of getting your money back.
However, debt collection attorneys are more likely to succeed than collection agencies when collecting the money. A collections law firm like BBLaw will get you more money back in the long run.
Collection Agencies
When it comes to debt collection, most people immediately think of a collection agency. These third parties charge you when a debt is collected and may do so through fixed fees or a percentage of the total amount due to the third party collecting the debt for you.
To reach debtors, these organizations employ automated phone systems and computer algorithms.
Collection Law Firm
In addition to making phone calls and mailing letters, attorneys have the authority to sue debtors for unpaid debt. Your case will be handled by a team of professionals in their area at their firm.
The Big Difference
Clients cannot be sued by collection agencies. However, the capacity of collection agencies to file reports with credit bureaus, to conduct phone calls, and to send letters does not always compel debtors to pay up.
This kind of agency isn’t permitted by law to claim it has an attorney on staff if it doesn’t. Because of this, many people don’t take these groups seriously and don’t pay their bills.
A collection agency has few options when a customer refuses to pay their account and refuses to be coerced into doing so. A collection attorney can take more meaningful action.
Because they are an attorney, there are no regulations that prevent them from warning debtors that legal action would be taken if they do not pay their bills. ”
When it comes to getting your money, a collection agency is likely to follow the same measures you would take yourself. That does not necessarily imply that an agency will be able to do the assignment more effectively than you would.
It is common for debt collection agencies to levy extra fees if the case is transferred to a lawyer, since it is impossible for them to recover your money on their own. As a result, you’ll have to shell out even more money on top of the initial costs. Collection agencies aren’t guaranteed to get your money back for you.
Often, collection companies use agents who only talk to individuals when an automated system phones them and follows a pre-written script for the discussion that follows.
Specialized attorneys that specialize in debt collection have a more focused and committed approach. An attorney’s whole staff will be devoted to your case and chasing your debt until it is paid in full.
As with an agency, lawyers may begin the procedure in the same manner as they would. The debtor may not respond to phone calls or letters, but when that fails, a lawyer is ready to take the issue all the way to court. When debt collection proceedings make it to court, the debtor is often found in default.
Further legal action, like wage garnishment or the seizure of earnings from the debtor’s company, may be taken by your attorney.
Get the Money Faster
You undoubtedly want your money as quickly as possible when you’re trying to collect a debt. As a result, debt collectors might wind up holding accounts for years without ever obtaining any money from their clients. Unless they have no other choice, agencies are reluctant to give over a case to collection lawyers because they must pay a substantial fee.
A collection attorney has the ability to initiate legal action to encourage your debtors to pay quickly. They will never have to sell your account since they can take the appropriate measures on their own.
Commercial Collections Made Easy
As a leading debt collection law firm, we represent some of the country’s major banks, insurance corporations, and private businesses.
We Help Companies And Small Businesses Throughout the United States
From pre-litigation recovery, collection litigation, and judgment enforcement to representation in bankruptcy and insolvency litigation proceedings, we provide our creditor customers with legal services.
The proportion of commercial revenues we recover and the speed with which we do so make us one of the top legal firms in the nation every year.
Pre-Litigation Collection
Our pre-legal collection law firm includes a demand letter series and collection calls from experienced lawyers and a team of competent non-attorney commercial collectors. In the firm’s pre-litigation service, the focus is on resolving conflicts. The firm’s customers benefit from a high percentage of recoveries without the time and cost of litigation.
Services for Enforcing Judgments
Our customers benefit from the use of cutting-edge technologies and a specialized judgment enforcement section. When judgment debtors try to escape creditors by transferring assets in a dishonest manner, cooperation between the firm and outside investigators enables post-judgment recovery.
Bankruptcy and Creditors’ Rights
Our customers know that they can count on us to protect their debtor’s rights and advocate on their behalf in bankruptcy court.
To guarantee that our client’s entitlement to recover payment of outstanding amounts accrued as a consequence of fraud or fraudulent behavior is protected, our lawyers have extensive expertise in litigating bankruptcy court cases, such as adversary proceedings in the Federal Bankruptcy court.
Our commercial collection services include:
- Adversary Proceedings
- Collection Litigation
- Proof of Claims
- Motions for Relief
- Asset Location
- Bankruptcy & Insolvency Litigation
- Pre-Suit Collections
- Judgment Domestication & Enforcement
Frequently Asked Questions About A Commercial Collection Law Firm
What is the difference between a “commercial collection law firm” and a “consumer collection law firm”?
In the field of “commercial collections,” debts owing to a business by another firm or a person in connection with a business debt are collected. Consumer debts that were incurred for personal, family, or home usage are referred to as “consumer collections.”
The Fair Debt Collection Practices Act is only one of several federal and state rules that govern consumer collection actions. Commercial collection operations, on the other hand, are much less strictly controlled.
Why should I use a collection law firm instead of a collection agency?
Most debt collection companies don’t do much more than send account debtors automatic warning letters.
These are nearly always “form” letters, which are simply pushed out of a computer in batches as big or little as required and include varied names, addresses, and money amounts.
Depending on the agency, these letters may be followed up with phone calls.
To automate these calls, collection agencies often use “robo-call” software. When the chances of success become remote, the agency is more likely to reduce its aggressiveness on behalf of the creditor.
As a result of their huge volume, collection agencies are forced to use an “assembly line” approach to every case they take on.
When working with a business client, a collections law firm with collections attorneys who are interested in establishing a long-term relationship will devote more time to getting to know them and developing a plan tailored to their specific requirements and circumstances and will be more likely to succeed in collecting the debt.
How does a collection attorney handle the debt collection?
- An assessment of the debtor’s financial situation, as well as its obligations and assets, is often the first step in most collection cases. Following this inquiry, it was decided whether more collecting attempts would be necessary.
- If the client has complete records of its transactions with the debtor, the inquiry will be simpler and more productive. For the sake of collecting the debt at issue, we will also advise the client on how to “tighten its documentation” so that it may better position itself in future collection situations, in addition to reviewing these documents.
- Documents involving promises of payment by an entity but without the personal guarantee of one of the company’s principals are common. This absence of a guarantee of payment by the client’s customers may also be seen in the terms of the customer agreements that the client has with their customers.
- Such clauses can be written if asked for, but we usually tell our clients to put them in their form agreements.
- The probe is followed by a letter requesting payment. The debtor may react to a demand letter with a request to discuss a settlement, which is common in certain cases. Due to the fact that it might save lengthy and distracting litigation, this is typically a beneficial development.
- The next step is to file a lawsuit if the demand letter does not get a response. It is possible for a creditor to begin a collection action in several New Jersey courts. The choice of a specific court is based on the amount of money involved in the case, with smaller sums going to courts with a focus on speeding up the claims process.
- Some cases result in a favorable settlement before the entire legal process is completed.The creditor may have to “go a few rounds” with the debtor in other cases and even go to trial in other cases. However, a trial is only required if there are disagreements about facts. Many cases of debt collection are quickly settled through motion practice, which leads to a verdict that is good for the client.
- Execution and collection of a judgment may only commence when it has been received and docketed. There are a variety of ways to achieve this objective. For debtors, subpoenas may be issued requiring them to provide a wide range of financial information. Assets may be seized, and earnings can be garnished as well.
- Debtors commonly try to conceal assets or transfer them to other people in order to keep them out of the hands of their rightful creditors. To ensure that the client’s judgment is paid, the collection attorney will try to locate hidden assets or correct improper transfers. It is during this time that interest on the judgment is accrued at the judgment rate.
- Clients often express worry about wasting time and money on a ruling that will never be implemented. In most cases, we urge our clients to get a judgment and register it in the court system. It’s already accumulating interest at the rate of the judgment, as stated before. It is also not uncommon for an individual to take steps to pay off the judgment, even if the company doesn’t. This is because the judgment makes it harder for the individual to get credit (for example, as a guarantor).
The debtor may also attempt to flee and conceal himself in bankruptcy court. To avoid this unfortunate outcome, it is best to choose a collection attorney who is also knowledgeable about bankruptcy. We have extensive expertise in both state and federal bankruptcy cases.
It is possible to have a mix of hourly rates, straight contingency, or both. A collections law firm will likely have a CRM for this to make the job easier. As part of the first meeting, a retainer agreement is drawn up that specifies how much a lawyer would charge for his or her services.
How likely is it that you’ll be able to collect money from a debtor?
This question is asked by every businessperson who reaches out to us. A number of variables come into play, including the following:
- Is the receivable at issue old enough to warrant a lawsuit?
- Are the client’s documents complete, accurate, and up-to-date?
- Are the debtor’s assets unencumbered?
- Is the debtor already in bankruptcy or collection litigation?
A thorough study of the debtor’s finances may address some of these issues. Some debts are plainly more recoverable than others, and it’s never a bad idea to try to collect them.
Do we only handle commercial collections?
Businesses that owe money to others are the primary focus of our debt collection operation. Companies who want to enforce individual or personal guarantees of company debt are among our customers. We sometimes take retail collection claims, like credit card receivables, depending on the client and the type of debt involved.
The Bottom Line
Our customers know that collection agencies can only recover a debt if they owe more than a few hundred dollars. However, if a debtor refuses to pay a big amount, a collection attorney may take legal action to ensure that you are paid as promptly as possible.
Debt collection law firm in New York City may help you develop a case and defend you in court if you have debtors who refuse to pay.
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