There are times when every business owner feels they need to call in the “big guns” to help collect an outstanding debt. Should you call a debt collection agency or hire an attorney for you collection needs? How do you know they are legitimate and follow the myriad of laws that are in place to protect the debtor & entity owed the debt. Here are some steps business owners should consider as they are contemplating their next moves.
First, exhaust your other avenues
If you have a debtor who’s behind on their payment, you should not make a collection agency your first course of action. Not only will this come off as overly aggressive, but you’ll be immediately sacrificing any hope you have of getting paid in full. After all, debt collectors and lawyers will charge fees and/or percentages of the overall debt if they secure payment for you.
So how do you exhaust your other avenues? In truth, what you’ll be doing is a lot of what the debt collector themselves will end up trying: letters, phone calls, payment restructuring, and, if necessary, a discounted debt to at least get some return on what you’re owed.
Start the process by being polite and escalate the situation with professionalism.
Next, decide between a debt collector and a lawyer
So your letters, phone calls, and entreaties got you nowhere? It’s time to enlist the services of a professional. But which professional do you hire: a lawyer or a debt collection agency? For starters, it’s always a good idea to get the counsel of an attorney. They can advise you whether pursuing the matter through civil court or a collections agency is worth the time and expense. Moreover, they will often write demand letters for you on legal stationary. This sounds like a small thing, but it isn’t. Sometimes, a professional correspondence from a practicing attorney will motivate your debtor to pay up. After all, debtors don’t want to end up before a judge, explaining their motives for not paying you.
If your attorney’s letters go unanswered, you need to decide whether you’ll proceed with a collections agency, a lawyer, or drop the matter entirely. If your debt is fairly large and you’re willing to head to court for a judgment or lien, then a lawyer might be your best option.
On the other hand, you could hire a collection agency. Agencies have automated systems that follow up with your debtors, and with so many different collectors out there, you can likely find the one that fits your business type or your debt size. Agencies are a dime a dozen, and a lot of them will use automated systems and auto dialers to attempt to collect your debt.
Then, choose the right professional
If the debt is large or the situation is complex, you should consider finding a professional debt collection attorney. When considering an attorney, you should ask yourself the following:
What’s their track record?
Do they specialize in your specific debt?
Can you speak to their references?
Will they represent you in court if it gets to that point?
What is the fee structure and how will you get paid?
Make sure you get the answers you need. Ask the attorney what their strategy will be and how they follow up with you.
The Law Firm of Howe & Associates has a team of professional debt collection attorneys and paralegals who have years of experience and have a proven track record of getting results fast.