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
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.
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.