11 Aug, 2020

A Guide to Help You Understand Collection Attorneys

A Guide to Help You Understand Collection Attorneys

Debt Collection can be a frustrating process for most creditors. Statistics show that bad debts account for more than 60% of the money owed to small businesses. Small and medium enterprises report that they spend an average of 12 days every year chasing after debtors with unpaid invoices. The creditors spend endless time calling, writing demand letters, and offering discounted deals to persuade debtors to pay up. Creditors end up turning to debt collection attorneys or agencies to try to recover their money.

Debt Collections Agency vs. Collections lawyer

Though often confused to be the same thing, debt collection agencies and collections law firms are two separate entities. The two often differ in their mode of operations in two major ways.

Legal Right to Sue

A debt collections attorney has a legal right to take a debtor to court for non-payment. If the debtor rejects the negation settlements, the lawyer can file a civil lawsuit against them. Debt collection agencies can only contact, but cannot sue the debtor. They have a collections law firm to prosecute on their behalf.

Fee Structure

Collection agencies usually set a percentage of the recovered amount as the pay for the services rendered. Failure to recover the debt means that the agency does not receive any compensation. Debt collection law firms set the charges at a lower percentage, either as billable hours or flat fees.

What Can A Florida Collection Attorney Do For You?

Before taking any action against your debtor, it is important first to seek legal advice from an experienced debt collection lawyer. The attorney may help you to.

1. Prove Your Right to Sue

Your debt collection attorney can help gather the necessary data to prove your right to sue. The law firm employs paralegals and debt collection experts that may help dig deeper into the credit agreement between you and the defendant. If you are not the original creditor, the lawyer can follow the chain of custody to identify the origin of the debt.

2. File the Necessary Paperwork

The debt collections attorney can draft your demand letter for payment. Experienced in debt collection laws, the lawyer can help you avoid violating the Fair Debt Collection Protection Act. Breach the law may lead to a countersuit. Besides, the law firm can draft your negotiation contract agreements, pre-court filings, and all other necessary legal paperwork.

3. Litigate Your Case in Court

The debt collection lawyer can initiate a negotiation settlement offer, in a bid to find an amicable way to solve the stand-off. If the debtor remains adamant about not paying up, your lawyer can file a case against them in court. The lawyer will prosecute your case to obtain a favorable judgment that mandates the debtor to settle their bills. Your attorney can also assist in enforcing the legal remedies provided, such as.

  • Garnishment of debtor’s wages and bank accounts.
  • Levying of their assets.

Bottom-Line

Bad debts are the bane of most small businesses, as entrepreneurs struggle to recover payment from their debtors. Working with a debt collections attorney over an agency is preferable as they have the right to sue the debtor for failure to pay.