If your phone calls and letters have failed to resolve a debt issue with a business client, it may be time to seek professional services. But should you go to a collection agency or hire an attorney who specializes in debt collection?
Collection Agencies
There are different types of collection agencies. Some are local, others handle certain kinds of debt, and then there are national collection agencies. The cost to you to hire their services will vary depending on the volume of business you have to offer, and the amount of debt you need collected. You will likely pay a certain percentage of the amount collected. Some agencies require a full half of the amount recovered as a fee.
A collection agency will undertake many of the same collection efforts that you already have, such as phone calls and letter writing. What gives them an advantage (and which factors into the cost to you) is that they have specialized communications systems and software designed to automate the collections process effectively and cost-efficiently. However, they do not have the authority to take legal action unless they retain a law firm to do so on your behalf.
Debt Collection Lawyer
Lawyers who specialize in debt collection are more effective than a collection agency, especially if the debt is serious enough to warrant legal action. A lawyer may charge an hourly fee, collect a percentage of the amount recovered, or both. If you decide to pursue the matter in court, your costs to the attorney will include court-related fees and other charges in relation to the lawsuit.
While some might believe that going to a collection agency would cost less than hiring a lawyer, that’s certainly not always the case. The cost of collecting a debt depends on the scale and complexity of the collection effort. Sometimes a debt can be collected after only a few letters sent by a collection agency. At other times it is much wiser and more cost effective to hire an attorney to send letters and perform other relevant communications, and then file a lawsuit if necessary.
Sometimes companies go to a collection agency first, and then later hire an attorney if the agency’s efforts don’t yield desirable results. But to utilize the services of a collection agency only to have to hire a lawyer later is by far the most expensive scenario. At the Jayaram Law, you don’t pay us anything unless you recover your debt (or a portion of it). We handle your collection matters on a contingency basis. In 2010, we collected over 90% of all money due and outstanding to our clients.
The Jayaram Law routinely and successfully assists its clients in their business-to-business (b2b) collection needs. We take pride in obtaining payment on accounts receivables without fracturing critical business relationships or engaging in time-consuming and costly litigation efforts.
If you need business debt collection services conducted in a professional manner, contact our B2B (business-to-business) debt collection law firm by calling 312.454.2859 or visiting www.jayaramlaw.com.