Commercial Debt Collection Process

Commercial Debt Collection Process

The following points make this firm competently unique through the cooperation of the very best facts of a collection agency that operates as a law firm. Obviously, a collection agency cannot litigate but an attorney can. Once an attorney prepares a lawsuit he/she is no longer practicing collections, he/she is practicing law. This hybrid characteristic allows us to process the receivables referred for collection in an extremely efficient manner. Dollars available for collection and dollars actually collected are thereby maximized. The time factor in referring the matter from the client to the collection agency and then to a law firm is significantly reduced in the event the debtor will not pay and legal action is recommended.

Total legal representation will be provided in collection matters for your firm. Our process is as follows:

Initial Demand Letter

At the time a placement is recorded in our computer files, the computer will automatically print out our first letter called “Letter of Assignment”. Our initial letter to debtor(s) advising them that we represent you is major factor in convincing debtors that voluntary payment must be made. Additional factors are the continuity of pressure and legal proceedings facing them insofar as a law firm can commence collection activity as well as directly and immediately commence litigation (with consent of the client). These factors, combined with our proven relationships with our attorney network, assure expeditious handling, timely action and up to date reporting on the status of each case. This maximizes funds collected and reduces to a minimum the time in which the operations are effected. The Note Letter will contain the validation statement required by the Fair Debt Collection Practices Act and it serves the following purposes:

1. To advise the debtor that his/her account has been assigned for collection (required by law).

2. To allow the debtor the opportunity to deny, dispute, discuss or resolve his/her obligation as soon as possible (as required by law).

3. To determine whether we have been given the debtor’s correct address. If the letter is returned, skip-tracing procedure begins immediately.

Professional telephone contacts will also be made, with every possible effort made to retain the customer’s good will. Assessment of the claims viability is the key to determining the method of pursuit, and this is when experience and expertise is invaluable. Usually, arbitration is the desired means of handling the claim, so the ability to make the demand with-out alienating your debtor/client requires negotiating provides leverage in favor of your firm in the event of any disagreement. All considerations are reviewed and explained, as to the strategy that is being used, with the client/debtor. Our experience has taught us that for every debt, there is a scenario as unique to itself.

Skip Tracing And Hidden Asset Locating

Doing our homework provides the intelligence, essential and necessary for the evaluation of the viability of a claim, the importance of this element in the collection process can not be underestimated. Although skip-tracing and hidden asset location are separate in their function and goals, they are inter-related insofar, as they require resourceful investigative work. We are sensitive to this need, and that is why we give special consideration as to the screening and hiring of our personnel in these related departments. Capitalizing on their intuitive skills, is as important, if not more, than methods employed. The skip-tracing of individuals and the locating of assets is a science. The use of resources, ranging from phone books to state of the art data base technologies and the ability to analyze this data from the information provided, result in factual conclusions, and this perhaps is one of the most interesting aspects of our business.

Collection Account Reports:

New File/Collector Report: This report reduces to writing, file, and production requirements and account reprehensive goals. It is for the mutual benefit of the account representative and management, intending to reduce the element of misunderstanding and miscommunication. The report is generated at the beginning of each month, and whenever a new collector is hired, or a collector is assigned a new file.

Five-Minute Reviews: A sample five (5) accounts from each states in collector’s cue is reviewed by a supervisor to ensure compliance to standards when working an account, and instruction to account representative to improve quality of work on the file. This 5- Minute Review is performed three (3) times monthly.

Full File Review: Each account in each status in a collectors file is reviewed by supervisor to ensure compliance, and for supervision to provide instructions to improve the quality of work in file. This report is done twice a month.

Return (By Client): Accounts on recall list will be pulled by clerical, deleted from inventory report with reason noted, and mailed back to client the same day the request is made.

Uncollectable Accounts

When all skip tracing leads fail to result in debtor contact and our letter series isn’t successful in getting debtor to respond to our collection efforts, accounts are deemed uncollectable. They are then returned to client. Accounts are purged from collector’s desk (manager’s section) three (3) times monthly. These accounts are put on a separate desk, pending recall.

Payment Arrangements for Uncollectable Accounts

Basic Criteria For Arrangements: During talk-off #1, all pertinent information is obtained regarding debtor financial status. Once updated it becomes a financial statement to help A/R evaluate debtor’s financial situation. Financial statement and asset verification obtained in talk-off # 1 will help determine debtor’s financial capacity. A/R is instructed to pursue maximum amount debtor is capable if paying, over shortest period of time.

Maximum Allowable Payout Period: A/R instructs PPA program is available for six months period time. They must be reviewed for possible upgrade. Arrangement are reviewed for upgrading periodically (every quarter)

Broken Agreement Procedure: Debtor is contacted to ascertain why amount received is not what was agreed upon. If debtors circumstances have changed and new arrangements are justified, then new payment arrangement is instituted.

Please Note: CCRC Settlement authorization, for assigned accounts on an individual basis, to a minimum of seventy-five percent (75%) of gross amount of claim/debt.

Referring Uncollectable Accounts To A Commercial Collections Attorney

Criteria For Litigation: Debtor refuses to pay an account, and he/she has good address and verified assets. Accounts fitting this criterion will be referred to in-house attorney for suit. Client advised and suit authorization requested.

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