30 Nov, 2020

How a Collections Attorney Can Improve Your Odds of Debt Recovery

How a Collections Attorney Can Improve Your Odds of Debt Recovery

At one point, every creditor faces the much-dreaded situation of recovering money from reluctant clients. Debt collection can be a sticky process for most businesses. This is especially true when implementing debt collection practices while minimizing legal risks.

Understanding debt collection law is instrumental in recovering money owed to your firm. The Fair Debt Collection Practices Act (FDCPA) illegalizes the use of harassment, as well as unfair or dishonest tactics to force the debtor to pay. Debtor evasion tactics can cause the collection process to draw out. That’s where a debt collection law firm comes in.

Attorney Vs. Collection Agency

When it comes to debt collection, there are many benefits of hiring a Florida collections law firm over a collection agency. Collection agencies have limited capabilities to recover any commercial debt. They are not authorized under law to take any legal action against the debtor. However, a collections lawyer has the right to initiate a lawsuit against the debtor.

By choosing a Florida collection agency, you limit yourself to phone calls and emails, as well as the skills of the agent or the willingness of the debtor. An attorney, on the other hand, can comb through your contact agreements to gather information to prove your right to sue. The lawyer can then enforce post-judgment collection techniques to collect the debt due.

Post-Judgment Collection Methods

It would be nice if the debtor could just sign a check upon delivery of the judgment. Far more often than not, winning the lawsuit is one of the easiest phases of the debt collection process. It is in the collections attorney’s hands to take appropriate measures to enforce the ruling and collect the balance due. Here are some standard post-judgment collection techniques.

  1. Settlement: This formal collection method is popular when it becomes apparent that the debtor cannot or will not pay as per the ruling. The Florida collections lawyer can begin a negotiation process that allows the accused to pay less than the full judgment. Giving a discount ensures that you recover a percentage of debt owed in the long run.
  2. Wage Garnishing: One of the most familiar post-judgment collection techniques is wage garnishment. It is a legal ruling where a judge orders an employer to withhold a portion of the debtor’s earnings and pay back the creditor. The garnishments are subject to limitation under the Consumer Credit Protection Act. It may take longer for you to recover a high-value debt from an individual with low income.
  3. Judgment Lien: Your debt collections attorney can attach the debt to property owned by the debtor within a specific jurisdiction. The lien prevents the debtor from selling the property without first paying out the judgment collection. Statutory interests continue to accrue the entire time the debt remains unpaid.
  4. Judgment Levy: It is a far less common judgment collection technique. A local sheriff is ordered by the court to seize a portion of the debtor’s personal property to satisfy the judgment. The cars, furniture, jewelry, etc., are sold in a public auction, and the money raised is used to pay the creditors in line with lien priority.

Debt collection can be a frustrating process for most entrepreneurs. Engaging a collections law firm can increase the odds of recovering the balance owed. Once armed with a favorable ruling, your lawyer can aggressively pursue the judgment collection.