If you’re having trouble collecting debts owed to your company, you need a workable solution – not just for the current debts, but future ones, too. Otherwise, losses may increase as the debts remain unpaid and you pay out of pocket expenses and commissions to collect the monies owed.
So, it just makes sense to create an effective collection plan from the outset and add up all potential expenses, like debt collection attorney fees, to confirm you are taking all necessary steps to maximize your recoveries. The cost of your collection activities must not exceed the debt totals, after all, which could happen if you have to file numerous lawsuits to collect the monies owed by your customers.
As you consider the most efficient method to collect the monies owed to your company, you have to think about recovering debt collection attorney fees, your overall return on investment, and other key factors to find your ideal solution. Here’s a quick look at your options to consider.
Agency vs. Attorney for Debt Collection
After deciding to outsource your debt collection activities, your top choices are debt collection agencies or debt collection lawyers.
Collection agencies often work best when recovering many small debts owed to you for a short time. When you hire them, the agency will attempt to track down the debtor, and then help them
create a suitable payment arrangement. Then, they will collect payment and send you the remainder after they take their portion.
If the debtor refuses to pay, however, all the agency can do at that point is report it to the credit bureau and inform you of the issue. Credit agencies are not able to pursue the matter further, resulting in the need to hire a debt collection attorney anyway.
Debt Collection Attorney
When you bring in a debt collection attorney from the start, they can better follow the debt from its inception to final payment. Like a debt collection agency, they will help track down the debtor
with skip tracing and other proven methods. The debt collection attorney will advise the debtors of their balance owed and request payment in full. If authorized by you, they can help the debtor set up a payment plan instead to get the debt paid over time.
Oftentimes, just receiving correspondence from an attorney inspires debtors to pay the money owed in full to avoid legal trouble. If they don’t make any attempts at paying off the debt, then the attorney can pursue legal action and file a lawsuit through the court. While waiting on a court date, they can continue the negotiations in a final attempt to get payment and cease the
Since it can increase your debt collection expenses, a lawsuit should always remain a last resort. But it’s great to have as an option in case the debtors do not have any intention on paying what they owe to your company. The only way to have that option is by bringing in a debt collection attorney. Although you can hire them after giving a collection agency a chance, you’ll possibly have to pay fees to both entities instead of just one.
An Overview of Recovering Debt Collection Attorney Fees
Although hiring a debt collection attorney can help you expedite payment and minimize expenses, it’s important to work their fees into your calculations. In order to do that, you must determine if recovering debt collection attorney fees through the court is possible.
For their regular debt collection actions decided by default or limited debtor participation, attorney fees are nominal and well worth getting the debt paid back to your company. As the issue drags on, however, and eventually ends up in court, the fees can add up considerably.
The debtor is responsible to pay your attorney’s fees and costs incurred to recover the monies owed to your company if the debtor signs an agreement agreeing to pay your attorney’s fees or a Florida statute provides for the recovery of your attorney’s fees.
If your contract or Florida law permits you to hold the debtor accountable for recovering debt collection attorney fees, your customer may need to pay your court costs plus attorney’s fees along with their debt total. If they know that ahead of time, the customer may be more willing to save everyone the trouble – and expense – and settle before it comes time to file a lawsuit.
Want to Collect Debts Owed to Your Company? Call Kass Law
If you’d like to skip straight to collecting the debts owed to your company, you can always count on our team at Kass Law. We’re skilled in tracking down debtors, issuing collection letters, filing lawsuits, and collecting money owed to your firm. In addition to your basic collection activities, our team can handle your pre suit negotiations and take your debtors to court as needed to collect on the debts.
We welcome you to contact our team well before your commercial debts pile up or anytime you need to get your clients to pay up. Reach out to us today and learn how we can help.