When is a Collection Attorney
Necessary?
Do you need to collect your delinquent accounts,
unpaid debts or money judgments? Do you want to have it done efficiently
and professionally? One way to do this is using a collection attorney.
Collections attorneys have collections skills that most other attorneys
don't have.
How do you choose a Collections Attorney?
If a friend or associate can refer you to a
good attorney who collects efficiently, that's always the best bet.
If you're unsure when choosing, then remember that it's probably
much better if the attorney is local. If you're not satisfied, you
want to be able to walk into his or her office and get the accounts
returned to you.
Obviously your
collections attorney should be aggressive. Remember the squeaky wheel
principal? If your attorney is aggressive, then your debtor will
push the debt obligation to the top of the stack of bills. That's
what you want. You want the attorney to get the debtor's attention,
and keep his attention until the debt is paid.
Also, if you think your debtor may file for
bankruptcy, then ask the prospective attorney how he or she would
handle that. Bankruptcy is a very specialized area of law. Know how
well-versed your attorney is. But remember too that if your debt
is a simple breach of contract, there may be little recourse for
you in bankruptcy. But if the debt is for theft, fraud, an auto accident
where alcohol or drugs were involved, or for child or spousal support,
then you will want to fight in bankruptcy court to retain the debt
and not have it "discharged." You can collect on these
debts. Be sure your attorney can do that.
When should I get a Collections Attorney?
Collections attorneys know that the sooner
you try to collect from your debtor the better. The legal process
should be begun as soon as possible. Each month you wait can impact
the collectibility of the debt.
How much will it cost?
The cost of a good collections attorney will
vary. Sometimes there is an upfront investigation fee. This may be
anywhere from $50 to $300, depending on the type of debt. The attorney
has to make a living too, and doesn't want to take on a debt that
completely uncollectible. Please understand that. These investigations
may include the following:
- Skip trace address locating
- Bank account locating
- Asset locating
- Employment locating
- U.C.C. records
- Secretary of State records
- Credit data base
There should be no other major fees, unless
the attorney has to represent you in court. In that case, you'll
need to work out your own arrangement with the attorney. Many attorneys
work on a contingency. They don't get paid unless they are successful
in their collection efforts. That contingency arrangement is usually
around 30%. And it's worth it if your attorney is a good one.
What else?
Consider how much authority you will give
your attorney to settle for a lesser amount that what is owed you.
As a rule, the collections attorney should contact you if a settlement
is offered by the debtor or if the attorney feels it is wise to seek
a settlement. You should be fully involved in this process.
Finally, you already know that all attorneys
are equal. Not all collections attorneys are equal either. Your research,
questions, and due diligence is important to whether or not you will
finally be getting your money. Who you choose to help you is the
first important decision. Use all the resources available. Meet the
attorney if at all possible. Ask for references. Ask about his or
her experience in collecting debts or money judgments. Ask how full
his or her workload is. Is he knowledgeable in judgment recovery
as well? And be sure to ask about monthly or quarterly reports of
progress. And good luck in your quest to get paid!
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