Dealing with delayed payments in corporate litigation settlements can be a challenging process. In this article, we will discuss a comprehensive Recovery System for Company Funds that includes three phases to help companies recover outstanding debts.
Key Takeaways
- A thorough investigation of the debtor’s assets is crucial before determining the recovery possibility.
- Options include closing the case if recovery is unlikely or proceeding with litigation if recommended.
- Legal action may require upfront costs, but if unsuccessful, there will be no obligation to pay.
- Rates for collection services vary based on factors such as the number of claims and account age.
- The Recovery System involves proactive steps like sending letters, skip-tracing debtors, and involving affiliated attorneys.
Recovery System for Company Funds
Phase One
Within the first 24 hours of initiating Phase One, a multi-pronged approach is deployed to secure a resolution. Immediate action is taken to ensure the debtor is aware of the outstanding obligations. A series of four letters is dispatched, and comprehensive skip-tracing is conducted to gather the most current financial and contact information.
Efforts to contact the debtor are relentless, utilizing phone calls, emails, text messages, and faxes. The goal is to engage and negotiate a settlement swiftly. Should these attempts not yield the desired outcome within the first 30 to 60 days, the process seamlessly transitions to Phase Two, involving our network of affiliated attorneys.
The intensity of the recovery efforts during this phase is critical to set the tone for the debtor, indicating the seriousness of the situation and the company’s commitment to recovering the funds.
The following table outlines the initial contact strategy:
| Day | Action |
|---|---|
| 1 | First letter sent & skip-tracing begins |
| 2-30 | Daily contact attempts via multiple channels |
Persistence and a structured approach are the cornerstones of Phase One, laying the groundwork for subsequent phases if necessary.
Phase Two
Upon escalation to Phase Two, the focus shifts to intensified legal pressure. The assigned attorney drafts a series of demand letters and initiates direct contact with the debtor. Despite these efforts, some cases remain unresolved, necessitating a transition to the final phase.
In the event of persistent non-payment, a strategic decision is required. The path chosen here could significantly impact the financial recovery process.
The options at this juncture are clear-cut:
- Continue with standard collection activities, such as calls and emails.
- Proceed with litigation, accepting the associated upfront costs.
The costs for legal action are outlined below:
| Jurisdiction | Estimated Fees |
|---|---|
| Debtor’s Jurisdiction | $600 – $700 |
Should litigation be unsuccessful, the case concludes with no additional fees owed to the firm or affiliated attorney. The decision made at the end of Phase Two sets the stage for the potential recovery—or closure—of the case.
Phase Three
Upon reaching Phase Three, the path forward becomes clear. If the debtor’s assets and case facts suggest low recovery odds, we advise case closure—no fees owed. Conversely, choosing litigation triggers a decision point.
Withdrawal means no cost; pursuing legal action necessitates upfront fees—typically $600-$700. These cover court costs and filing fees, with our attorney initiating a lawsuit for all due amounts. Failure to collect post-litigation leads to case closure, again, at no charge.
Our fee structure is straightforward:
-
For 1-9 claims:
- Under 1 year: 30%
- Over 1 year: 40%
- Under $1000: 50%
- With attorney: 50%
-
For 10+ claims:
- Under 1 year: 27%
- Over 1 year: 35%
- Under $1000: 40%
- With attorney: 50%
Decisions at this juncture are pivotal. The choice to litigate or not can significantly impact your financial recovery process.
Remember, our rates are competitive, and our goal is to maximize your recovery while minimizing your expenses. Whether you opt for litigation or standard collection activities, we tailor our approach to your unique situation, always aiming for the optimal outcome.
Frequently Asked Questions
What is the Recovery System for Company Funds?
The Recovery System for Company Funds consists of three phases: Phase One, Phase Two, and Phase Three. Phase One involves sending letters to debtors, skip-tracing, and attempting to contact them for resolution. Phase Two includes forwarding the case to an affiliated attorney for further action. Phase Three involves either closing the case if recovery is unlikely or proceeding with litigation if recommended.
What happens if recovery is not likely in Phase Three?
If recovery is not likely in Phase Three, the case will be recommended for closure. In this scenario, there will be no fees owed to the firm or affiliated attorney. Alternatively, if litigation is recommended and the client decides not to proceed, they can withdraw the claim without owing any fees.
What are the costs involved in proceeding with legal action in Phase Three?
If the client decides to proceed with legal action in Phase Three, they will be required to pay upfront legal costs such as court fees and filing fees, typically ranging from $600.00 to $700.00. If litigation fails, there will be no fees owed to the firm or affiliated attorney.
What are the rates for collection services provided in Phase Three?
The rates for collection services in Phase Three depend on the number of claims submitted and the age of the accounts. Rates range from 27% to 50% of the amount collected, varying based on account age, amount, and whether the account is placed with an attorney.
What actions are taken in Phase One of the Recovery System?
In Phase One of the Recovery System, letters are sent to debtors, skip-tracing and investigations are conducted to gather financial and contact information, and attempts are made to contact debtors for resolution. Daily attempts are made to contact debtors for the first 30 to 60 days.
What happens in Phase Two of the Recovery System?
In Phase Two of the Recovery System, the case is forwarded to an affiliated attorney who will draft letters demanding payment from the debtor. The attorney will also attempt to contact the debtor via phone calls. If all attempts fail, the client will be informed of the next steps.
