Outstanding debt can be a huge burden on businesses. In fact, the average small business has around $83,000 in accounts receivable that are past due. Trying to recover that lost revenue on your own can seem daunting.
When Should You Bring in a Collection Attorney?
If your internal efforts to collect on past due accounts have failed after several attempts, it may be time to bring in a professional. Collection attorneys have the legal expertise and can use more recovery options.
More Benefits of Retaining Collection Attorneys
Beyond unlocking additional recovery methods, teaming up with experienced collection lawyers provides more advantages over trying to collect debts independently. Collection attorneys are well-versed in laws such as the Fair Debt Collection Practices Act and Uniform Commercial Code. This knowledge allows them to follow the rules while chasing debts.
Objectivity & Perspective
Managing your business, attracting new clients, and growing your enterprise should be your focus, rather than being burdened by the debt recovery procedures, legal rules and regulations. Debt collection attorneys provide a valuable perspective that includes their in-depth knowledge of debt recovery laws and recovery methods plus their knowledgeable staff. In the end there are more advantages over trying to collect debts on your own.
The following is a DRAMATIZATION AND IS NOT AN ACTUAL EVENT: JR Shipping’s CEO feels enraged by the $12,000 a former client has refused to pay and wants to teach them a lesson. However, the level-headed collection lawyers they work with help identify the root issues and negotiate a settlement that still recovers 67% within two months without expensive litigation.
Industry Expertise
Experienced collection firms understand the common obstacles to repayment in your specific industry. Attorneys focused on the construction, healthcare, retail, or hospitality sectors can pinpoint the most effective recovery methods.
For example, collection lawyers targeting defaulters in the landscaping industry know that seizing mowers, trucks, trailers and other business equipment tends to deliver rapid results. Such niche expertise produces better outcomes.
Check if an attorney has specialized experience in collecting in your field before retaining them. Their industry familiarity can translate into higher recovery rates.
Situations When Attorneys Can Help
- Complex cases involving legal disputes
- When you are ready to file a lawsuit or enforce a court judgment
- If the debtor tries to avoid payment through unethical means
The following is a DRAMATIZATION AND IS NOT AN ACTUAL EVENT: ACME Printing sent multiple demands to Meyers & Co requesting $4,800 in overdue payments, but received no response. Desperate to recover the lost sum, the owner decides to hire Robbins & Associates, who file a lawsuit and obtain a favorable ruling which achieves a 100% recovery through garnishing the debtor’s bank accounts and assets.
Using Legal Demand Letters
Collection attorneys commonly start by sending a formal demand letter insisting on repayment of the debt. These letters carry more legal weight than attempts by non-attorneys.
Why They Work
- Catches the attention of stubborn debtors
- Clearly spells out the creditor’s rights and options
- Warns legal action is imminent if debt remains unpaid
Filing Lawsuits and Enforcing Judgments
If a demand letter fails to compel payment, a collection attorney can take the next step of filing a lawsuit over the unpaid debt. Attorneys also know how to effectively enforce court judgments ordering repayment.
Utilizing Liens to Collect Debt
Liens are a powerful weapon in the debt collection arsenal. A lien represents a legal claim on assets or property as security for a debt. Collection attorneys can request court orders imposing liens on real estate, vehicles, equipment, or other assets owned by a non-paying debtor.
How Liens Pressure Debt Repayment
- Public records filing prevents sale or transfer of encumbered assets
- Secures priority claim over asset value up to lien amount
- Accumulates interest if debt remains unpaid over time
- Appears on credit reports damaging debtor’s ability to borrow
In many cases, the threat alone of a lien being recorded inspires reluctant debtors to finally settle accounts. If not, the associated restrictions give creditors tremendous leverage either forcing repayment through liquidation or creating an additional income stream via interest.
Wielding liens requires legal proficiency that our experienced attorneys possess. Our lawyers pick the best assets to put liens on. We properly file the liens to get you the most money back.
Getting Results Through the Legal System
The following is a DRAMATIZATION AND IS NOT AN ACTUAL EVENT: Coastal Goods receives a $9,200 judgment against Watson LLC but has not yet gotten paid. The company hires DeAngelis & Dowd, LLP who swiftly locate and seize the debtor’s assets. The law firm’s diligent execution of the court order secures full payment of the judgment amount plus all legal fees incurred.
Favorable Settlements
Even after winning a lawsuit, maximum recovery is often achieved by hiring a debt collection attorney.
Conclusion
Trying to collect on overdue customer invoices without help can end up being wasted effort. Experienced collection attorneys know how to apply legal pressure and have a toolbox of remedies to recover your precious cash flow.
Don’t let bad debts continue eroding your business’s bottom line. Call our office today to discuss how we can assist with your unpaid accounts receivable.
FAQs
1. What results can I expect from hiring a collection attorney?
Most collection attorneys recover 50-80% of past due debts, often reaching 100% when legal action is pursued. They know how to get stubborn debtors to finally make payments.
2. Is your law firm willing to negotiate debt settlements for less than what our business is owed?
We do not recommend or accept reduced settlements. Our firm pursues the full amount owed as a matter of principle. We will use every legal means possible, including lawsuits, judgments, and asset seizures, to recover 100% of the original debt along with all accrued interest and legal costs.
Even if a debtor claims inability to pay in full immediately, we will utilize wage garnishments, or liens to satisfy the total obligation. We pride ourselves on never compromising on what is owed to our clients.
3. How soon into the process can judgments be enforced?
Shortly after filing a lawsuit, we can seek early judgments directing debt repayment. Within weeks in many cases, we can commence seizures of financial assets and other debtor property to satisfy unpaid debts.
Don’t wait – call our office today to turn bad debts into cash flow.