When dealing with bankrupt clients who owe for chemical products, it is essential to have a strategic recovery system in place and consider litigation recommendations. This article provides insights into recovering company funds and navigating legal actions in such challenging situations.
Key Takeaways
- Implement a 3-phase Recovery System for efficient fund recovery process.
- Consider closure of the case if recovery is unlikely after thorough investigation.
- Be prepared to make a decision on proceeding with legal action if recommended.
- Understand the upfront legal costs involved in litigation and the potential outcomes.
- Explore competitive collection rates based on the number and age of claims submitted.
Recovery System for Company Funds
Phase One
Within the first 24 hours of initiating Phase One, a multi-pronged approach is set in motion to secure your company’s funds. Immediate action is taken to send out the initial demand letter, and a comprehensive skip-tracing process begins to pinpoint the debtor’s financial status and contact information. Our team engages in relentless pursuit, utilizing phone calls, emails, text messages, and faxes to reach a resolution.
Daily attempts are made to contact the debtor, with the goal of resolving the matter swiftly. If these efforts do not yield results within 30 to 60 days, the case escalates to Phase Two.
The initial phase is critical in setting the tone for the recovery process. It is designed to demonstrate to the debtor the seriousness of their obligation and the determination of our recovery efforts. Here’s a snapshot of the actions taken:
- First of four letters sent via US Mail
- Skip-tracing and investigation for optimal debtor information
- Persistent contact attempts by our collector
This phase lays the groundwork for a robust recovery strategy, ensuring that no stone is left unturned in the pursuit of what is owed to your company.
Phase Two
Upon escalation to Phase Two, the focus shifts to legal leverage. The assigned attorney drafts a series of demand letters, each escalating in tone, to signal serious intent. Concurrently, persistent phone calls aim to establish direct dialogue with the debtor.
- Demand letters on attorney letterhead
- Persistent phone contact attempts
- Evaluation of debtor’s response
If these intensified efforts fail to yield results, a strategic decision is required. The next step hinges on the debtor’s assets and the likelihood of recovery. A recommendation is prepared, outlining the potential for either case closure or litigation.
The choice between continued pursuit or strategic withdrawal must be carefully considered, weighing the costs against the potential for fund recovery.
Phase Three
At the culmination of our recovery efforts, a decisive moment arrives. Decisions must be made based on the outcome of our comprehensive investigation into the debtor’s assets and the surrounding facts of the case. If the likelihood of recovery is deemed low, we advise closure of the case, absolving you of any financial obligation to our firm or affiliated attorneys.
Should litigation appear viable, you face a critical choice:
- Withdraw the claim at no cost.
- Continue standard collection activities.
- Proceed with legal action, bearing the initial legal costs.
The upfront legal costs typically range from $600 to $700, depending on the debtor’s jurisdiction. These cover court costs, filing fees, and other related expenses.
Upon choosing litigation, our affiliated attorney will initiate a lawsuit to recover all monies owed. In the event that litigation does not result in collection, the case will be closed without further charges to you.
Our fee structure is straightforward and competitive, with rates varying based on the number of claims and age of accounts. For instance:
- Accounts under 1 year: 30% (1-9 claims) or 27% (10+ claims)
- Accounts over 1 year: 40% (1-9 claims) or 35% (10+ claims)
These percentages reflect the amount collected, ensuring our interests are aligned with your success.
Litigation Recommendations
Closure of Case
When the recovery of funds from bankrupt clients hits a dead end, closure of the case may be the most prudent step. This decision follows an exhaustive review of the debtor’s assets and the surrounding facts of the case. If the likelihood of fund recovery is deemed low, it’s time to cut losses and conserve resources.
Closure does not equate to financial burden on your part. Our firm ensures that you owe nothing for the closure recommendation. This policy reflects our commitment to a risk-free partnership in your attempts to recover owed funds.
In the event of case closure, the focus shifts to mitigating further losses and reallocating efforts to more promising recoveries.
Our fee structure is transparent and contingent on successful collection, as outlined below:
- Accounts under 1 year: 30% (1-9 claims) or 27% (10+ claims)
- Accounts over 1 year: 40% (1-9 claims) or 35% (10+ claims)
- Accounts under $1000.00: 50% regardless of claim count
- Accounts placed with an attorney: 50% regardless of claim count
This approach ensures that our interests are aligned with yours, incentivizing the successful recovery of your company’s funds.
Proceeding with Legal Action
When the decision to proceed with legal action is made, it’s crucial to understand the financial commitment involved. Litigation is a significant step that requires upfront investment in court costs and filing fees. These fees typically range from $600 to $700, depending on the jurisdiction of the debtor.
Preparation is key. Upon payment, our affiliated attorney will initiate a lawsuit for the recovery of all monies owed, including the costs to file the action. Here’s a breakdown of potential upfront legal costs:
| Expense Type | Estimated Cost |
|---|---|
| Court Costs | $300 – $400 |
| Filing Fees | $300 – $350 |
If litigation efforts do not result in recovery, rest assured that you will owe nothing further to our firm or our affiliated attorney.
Remember, the goal is to recover what is owed to you. Should you choose to litigate, our firm will support you every step of the way, ensuring that your case is handled with the utmost professionalism and dedication to achieving a favorable outcome.
Dealing with Bankrupt Clients Who Owe for Chemical Products
What is the Recovery System for Company Funds?
The Recovery System for Company Funds consists of three phases: Phase One, Phase Two, and Phase Three. In Phase One, initial actions are taken to contact the debtor and attempt to resolve the matter. Phase Two involves forwarding the case to an affiliated attorney for further legal action. Phase Three includes recommendations for either closing the case or proceeding with litigation.
What happens if the possibility of recovery is not likely in Phase Three?
If the possibility of recovery is not likely in Phase Three, the recommendation may be to close the case. In this scenario, there will be no obligation to pay the firm or affiliated attorney for the results. Alternatively, if litigation is recommended, the client will have the option to proceed with legal action by paying upfront legal costs.
What are the rates for DCI’s collection services?
DCI provides competitive collection rates based on the number of claims submitted and the age of the accounts. Rates vary from 27% to 50% of the amount collected, depending on factors such as account age, amount owed, and involvement of an attorney.
What actions are taken in Phase One of the Recovery System?
In Phase One, actions include sending letters to the debtor, skip-tracing and investigation of debtors, and attempts to contact the debtor for resolution. If initial attempts fail, 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 a local attorney within the network. The attorney drafts letters demanding payment, contacts the debtor, and provides recommendations for further steps if resolution is not reached.
What are the options for clients in Phase Three of the Recovery System?
In Phase Three, clients have the option to either close the case if recovery is unlikely or proceed with litigation by paying upfront legal costs. If litigation fails, there is no obligation to pay the firm or affiliated attorney.
