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How to Pursue Unpaid Bills After Mediation Settlements

After successfully mediating settlements, the next step is to pursue unpaid bills through a structured recovery system. This system involves three phases that aim to recover company funds efficiently and effectively. Each phase is designed to escalate the recovery process, from initial contact with debtors to potential legal action. Understanding this system is crucial for businesses seeking to collect outstanding debts post-mediation settlements.

Key Takeaways

  • The recovery system for unpaid bills involves three phases: Phase One, Phase Two, and Phase Three.
  • Phase One includes sending letters to debtors, skip-tracing, and contacting debtors to resolve the matter within the first 30 to 60 days.
  • Phase Two involves forwarding the case to affiliated attorneys for legal action if initial attempts to resolve the debt fail.
  • Phase Three offers two options: closing the case if recovery is unlikely or proceeding with litigation by paying upfront legal costs.
  • Rates for collection services vary based on the age and amount of the accounts submitted, with different percentages for accounts under 1 year old, over 1 year old, under $1000, and those placed with an attorney.

Recovery System for Unpaid Bills

Phase One

Upon initiating Phase One, immediate action is taken to address unpaid bills. Within 24 hours, a series of four letters begins its journey to the debtor, marking the start of the recovery process. The debtor’s information undergoes skip-tracing and thorough investigation to ensure the best financial and contact details are on hand.

The collector’s role is pivotal, employing a multi-channel approach including phone calls, emails, text messages, and faxes to reach a resolution. Persistent daily attempts are made for the first 30 to 60 days, setting the stage for a robust recovery effort.

If these efforts do not yield results, the process seamlessly transitions to Phase Two, involving legal escalation. The table below outlines the initial actions taken in Phase One:

Action Item Description
Letter Series Initiation First of four letters sent via US Mail
Skip-Tracing & Investigation Gathering optimal financial and contact information
Collector Engagement Daily contact attempts using various communication methods

Phase Two

Upon escalation to Phase Two, the case is handed over to a local attorney within our network. Immediate action is taken to draft and send a series of demanding letters on law firm letterhead. Concurrently, the attorney’s team initiates phone contact with the debtor, reinforcing the urgency of the situation.

If these intensified efforts do not yield a resolution, a detailed report is prepared for the client. This report outlines the challenges encountered and provides a clear recommendation for Phase Three.

The following table summarizes the attorney’s actions during Phase Two:

Action Description
Letter Drafting Drafting and sending of demanding letters.
Phone Contact Persistent attempts to reach the debtor.
Report Preparation Compilation of case issues and recommendations.

Should Phase Two prove unsuccessful, the path forward is carefully considered. The client is presented with options, including proceeding to litigation or closing the case, based on a thorough assessment of the debtor’s assets and the likelihood of recovery.

Phase Three

After exhaustive efforts in the first two phases, Phase Three presents a critical juncture. Here, the path forks based on the debtor’s asset investigation and case facts. If recovery seems unlikely, we advise case closure—no fees incurred. Conversely, choosing litigation means fronting legal costs, typically $600-$700.

Should you opt for legal action, the following fees apply upon successful collection:

  • Under 1 year: 30% (1-9 claims) or 27% (10+ claims)
  • Over 1 year: 40% (1-9 claims) or 35% (10+ claims)
  • Under $1000: 50% (1-9 claims) or 40% (10+ claims)
  • With attorney: 50% (all claims)

Deciding against litigation? You can withdraw the claim or continue standard collection efforts at no extra cost.

Remember, if litigation doesn’t yield results, you owe nothing further. This phase is about making informed decisions with clear financial implications.

Frequently Asked Questions

What is the Recovery System for Unpaid Bills?

The Recovery System for Unpaid Bills consists of three phases: Phase One, Phase Two, and Phase Three, each with specific actions and procedures to pursue unpaid bills after mediation settlements.

What happens in Phase One of the Recovery System?

In Phase One, the debtor is contacted via mail, skip-traced, and investigated for financial and contact information. Collection attempts are made through various communication channels, and if unsuccessful, the case proceeds to Phase Two.

What is the process in Phase Two of the Recovery System?

In Phase Two, the case is forwarded to an affiliated attorney who sends letters demanding payment and attempts to contact the debtor. If resolution is not reached, recommendations for the next steps are provided.

What are the options in Phase Three of the Recovery System?

In Phase Three, two options are presented: closure of the case if recovery is unlikely, or proceeding with litigation. If litigation is chosen, upfront legal costs are required, and the case may be pursued through legal action or standard collection activities.

What are the costs associated with legal action in Phase Three?

The costs for legal action in Phase Three typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction. If litigation fails, there are no additional costs owed to the firm or affiliated attorney.

What are the collection rates for unpaid bills under the Recovery System?

The collection rates vary based on the number of claims submitted and the age and amount of the accounts. Rates range from 27% to 50% of the amount collected, with different rates for accounts placed with an attorney.


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