Enforcing payment terms after legal disputes in business can be a challenging process that requires a strategic approach. In this article, we will discuss a recovery system for company funds and recommendations for legal action after facing legal disputes in business transactions.
Key Takeaways
- Implement a 3-phase Recovery System for efficient fund recovery in business.
- Consider the possibility of recovery and make a decision on closure or litigation based on thorough investigation.
- Be prepared to cover upfront legal costs if proceeding with legal action.
- Understand the rates for collection services based on the number and age of claims submitted.
- Engage with affiliated attorneys for effective legal representation and debt recovery.
Recovery System for Company Funds
Phase One
Within the first 24 hours of initiating Phase One, a multi-pronged approach is launched to secure company funds. Immediate action is taken to ensure the debtor is aware of the outstanding debt. A series of four letters is dispatched, and extensive skip-tracing is conducted to gather the debtor’s financial and contact information. Our team engages in relentless pursuit, utilizing phone calls, emails, text messages, and faxes to negotiate a resolution.
Daily attempts are made to contact the debtor, with the goal of reaching an amicable settlement within the first 30 to 60 days. Failure to resolve the matter escalates the case to Phase Two, involving legal counsel within the debtor’s jurisdiction.
The initial phase is critical, setting the tone for the recovery process. It’s a period marked by diligence and persistence, as every effort is made to collect without resorting to legal action. The following list outlines the key actions taken:
- Dispatch of the first letter via US Mail
- Comprehensive skip-tracing and investigation
- Persistent contact attempts by our collector
Should these efforts not yield the desired results, the transition to Phase Two is immediate and seamless, ensuring no momentum is lost in the recovery process.
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. The attorney’s first action is to send a series of demand letters to the debtor, emphasizing the urgency of payment. Concurrently, the attorney’s team initiates contact through phone calls, aiming for a swift resolution.
If these intensified efforts do not yield results, a detailed report is prepared. This outlines the debtor’s response, or lack thereof, and provides a clear picture of the situation at hand.
The following steps are taken by the attorney:
- Draft and send demand letters on law firm letterhead.
- Make direct phone calls to the debtor.
- Assess the debtor’s ability to pay.
Should these measures fail, we proceed to the decisive Phase Three, where the path forward is determined based on the likelihood of fund recovery.
Phase Three
Upon reaching Phase Three, the path forward becomes clear. The investigation into the debtor’s assets and the surrounding facts of the case will lead to a pivotal decision: to close the case or to litigate.
If closure is advised due to low recovery prospects, rest assured, no fees will be owed to our firm or affiliated attorneys.
Choosing litigation requires an upfront investment for legal expenses, typically ranging from $600 to $700. These costs cover court fees and filing charges, initiating a lawsuit to reclaim all owed funds, including litigation costs.
Our fee structure is straightforward and competitive, with rates varying based on claim age, amount, and volume. For instance:
- Accounts under 1 year: 30% (1-9 claims) or 27% (10+ claims)
- Accounts over 1 year: 40% (1-9 claims) or 35% (10+ claims)
- Accounts under $1000: 50% regardless of claim count
- Accounts requiring attorney involvement: 50% of the amount collected
In the event that litigation does not result in recovery, the case will be closed with no further obligations. The choice is yours, and our team is ready to support your decision with dedication and expertise.
Recommendations for Legal Action
Closure of the Case
After exhaustive efforts to collect, a decision point arrives. Closure of the case may be the most prudent step when the likelihood of recovery is dim. This juncture signifies a halt in active pursuit, but not necessarily the end of the road.
Settlement is not always possible, and when the dust settles, the financial implications must be clear. A structured fee schedule ensures transparency:
- Accounts under 1 year: 30% of collected amounts
- Accounts over 1 year: 40% of collected amounts
- Accounts under $1000.00: 50% of collected amounts
- Accounts with legal involvement: 50% of collected amounts
For cases with ten or more claims, reduced rates apply, reflecting the volume of business and the ongoing partnership.
In the event of closure, rest assured, no further fees will be owed to our firm or affiliated attorneys. This policy underscores our commitment to a risk-free partnership and aligns our success with your recovery outcomes.
Proceeding with Legal Action
Once the decision to pursue legal action is made, the company must prepare for the financial implications. Upfront legal costs are a reality, with fees such as court costs and filing fees typically ranging from $600 to $700. These expenses are necessary to initiate the lawsuit and seek recovery of the owed funds, including the costs of filing the action itself.
It is crucial to understand that litigation is a step taken when other collection efforts have failed. This path should be considered carefully, as it involves both time and financial resources.
The rates for collection services vary, and they are contingent on the success of the recovery process. Here’s a brief overview of the rates based on the number of claims and other factors:
- For 1-9 claims:
- Accounts under 1 year: 30%
- Accounts over 1 year: 40%
- Accounts under $1000: 50%
- Accounts with an attorney: 50%
- For 10 or more claims:
- Accounts under 1 year: 27%
- Accounts over 1 year: 35%
- Accounts under $1000: 40%
- Accounts with an attorney: 50%
In the event that litigation does not result in recovery, the case will be closed, and the client will not owe any additional fees to the firm or the affiliated attorney. This no recovery, no fee policy ensures that the client’s financial risk is minimized.
Frequently Asked Questions
What is the Recovery System for Company Funds?
The Recovery System for Company Funds consists of three phases: Phase One involves sending letters to debtors, skip-tracing, and contacting debtors for resolution. Phase Two includes forwarding the case to affiliated attorneys for legal action. Phase Three offers recommendations for either closing the case or proceeding with litigation.
What happens if the possibility of recovery is not likely in Phase Three?
If the possibility of recovery is not likely in Phase Three, the recommendation may be to close the case, and you will owe nothing to the firm or affiliated attorney. Alternatively, if litigation is recommended and pursued, upfront legal costs will be required.
What are the upfront legal costs for proceeding with legal action in Phase Three?
For proceeding with legal action in Phase Three, upfront legal costs such as court costs and filing fees typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction.
What are the rates for DCI’s collection services?
DCI provides competitive collection rates based on the number of claims submitted within the first week of placing the first account. Rates vary for accounts under 1 year in age, accounts over 1 year in age, accounts under $1000.00, and accounts placed with an attorney.
What actions are taken in Phase One of the Recovery System?
Phase One of the Recovery System involves sending letters to debtors, skip-tracing, investigating debtors’ financial and contact information, and attempting to contact debtors for resolution using various communication methods.
What happens in Phase Two of the Recovery System?
In Phase Two, the case is forwarded to a local attorney within the network, who drafts letters demanding payment from the debtor and attempts to contact the debtor. If all attempts fail, recommendations for further steps are provided.
