SHOULD I HIRE AN ATTORNEY?

Advantages of Hiring an Attorney Over a Collection Agency

There are numerous and profound advantages to utilizing a skilled attorney over a collection agency. To begin with, collection agencies have extremely limited capabilities. It is an undeniable fact that a non-attorney collection agent is restricted to sending letters and making telephone calls - that's it! Of course, a collection agency won't tell you this when soliciting your business; instead, they will try to win you over by presenting false or misleading statistics, coupled with telling you that there won't be any up-front expenses. But just think for a moment: If letters and phone calls actually worked, wouldn't you have already collected the debt yourself? The answer is obvious: If a debtor has already ignored your letters and telephone calls, the debtor will similarly ignore a collection agency's letters and telephone calls. But there's more. A consumer debtor cannot only ignore a collection agency, he or she can stop the communication altogether. Pursuant to the Fair Debt Collection Practices Act, the consumer debtor merely has to notify the collection agency in writing that he or she refuses to pay the debt or that he or she wishes the collection agency to cease further communication. At that point, the collection agency hits the proverbial brick wall and it's game over.

Put the Power of an Attorney on Your Side

The truth is that neither a consumer debtor nor a commercial debtor has anything to fear from a collection agency. An attorney, however, is an entirely different matter. Unlike a collection agency, an attorney doesn't have to wait around aimlessly until a debtor feels like responding to letters and telephone calls. Instead, the attorney can go on the offensive by filing a lawsuit. In many instances, the mere act of filing of the lawsuit can get the instantaneous attention of a previously disinterested debtor. For those debtors who fail to make immediate arrangements for payment after the lawsuit is filed, an attorney has the ability to pursue various pre-judgment remedies, including attaching the debtor's real estate and freezing the debtor's bank accounts. Utilizing these pre-judgment remedies serves the dual function of obtaining pre-judgment security for the collection of the eventual judgment, and sends a proverbial shot across the debtor's bow as to the type of aggressive manner in which the case will be prosecuted. The prospect of having a lien put on their real estate or having access blocked to their bank accounts sends chills up most debtors' spines. Moreover, coming out of the blocks hitting hard frequently destroys a debtor's willingness to fight. After judgment is obtained, there are numerous potent post-judgment collection techniques and procedures that an experienced attorney can put into motion. These measures include seizing the debtor's non-exempt assets and garnishing the debtor's wages. No collection agency on earth can do this! An attorney also has the power to bring a debtor before a judge to hold the debtor in contempt of court. If found in contempt, the attorney can request that the debtor be incarcerated for a period of up to 90 days in order to coerce payment, an incredibly effective tool to show the debtor that the days of stall, hinder and delay are over.

Additional Benefits of Having an Attorney in Your Corner

Having a knowledgeable and highly experienced attorney only a phone call or email away offers additional many additional perks for business owners and executives. Chief among them is the ability to have questions answered or documents reviewed by a legal professional before a problem occurs. A little preventative legal medicine can often make the difference between a sucessful outcome and a missed opportunity. An attorney can also greatly assist business owners and executives with developing a detailed plan of action concerning the processing of delinquent accounts receivable. Collection agencies are simply incapable of matching wits with an attorney who is intimately familiar with the ins and outs of debt collection.

What You Don't Know About Collection Agencies

Perhaps the biggest misperception about collection agencies is that they are cheaper than using attorneys. Not true! In many instances, a collection agency's fees are higher than those charged by an attorney, sometimes substantially higher. Why is this the case? Because in the event the collection agency is unsuccessful in collecting the debt through letters and telephone calls, it must then turn the matter over to an attorney for suit anyway. Yes, that's correct! This is the dark little secret that no collection agency wants you to know about. Upon referring the matter to the attorney, the collection agency must share its negotiated fee with the attorney. To hedge against loss of income through the fee sharing arrangement, the collection agency needs to charge a higher up-front percentage fee to the client. Indeed, while most attorneys charge a contingent fee of 33.3%, it is commonplace for collection agencies to charge between 40% and 50%. What makes matters even worse is that collection agencies are often reluctant to refer matters out for suit, with the agencies sometimes trying to work the accounts for months, and even years, without obtaining payment rather than resort to losing a portion of the fees. The individual collectors in the collection agency are traditionally paid on a commission basis, thus cutting into the amount of the fee ultimately paid to the agency and also resulting in the same disincentive on the collector's part to "give up" on an account and turn it over to an attorney.

Make the smart choice: Hire an attorney today!

In sum, the fact of the matter is that collection agencies talk loudly and carry a small stick. They are largely ineffective, particularly where attempts to "pester" the debtor to death have not worked. Even for relatively small amounts of money owed, a small claims lawsuit is exponentially more effective than a series of boilerplate letters and harassing telephone calls. Referring accounts receivable to a collection agency is a major gamble that rarely pays off. Moreover, based purely on a self-serving agenda, collection agents cause delays that jeopardize the collectability of claims. Attorneys are not more expensive, and with a well-drafted credit agreement or contract attorney's fees are added into the judgment itself, thereby passing the cost along to the debtor. Using the professional services of an experienced attorney over a collection agency is a quintessential no-brainer!

Contact D. Baker Law Group, P.C. today for an in-depth, confidential consultation.