Handling non-payment for custom chemical blends can be a challenging aspect of business operations. In order to recover company funds effectively, a strategic Recovery System is essential. This system involves three key phases aimed at maximizing the chances of retrieving the outstanding payments from debtors.
Key Takeaways
- Utilize a 3-phase Recovery System for efficient fund recovery process
- Engage in thorough investigation and communication with debtors in Phase One
- Consider legal action or closure based on recovery likelihood in Phase Three
- Understand the costs and options associated with litigation in the recovery process
- Be aware of the competitive collection rates offered based on the number and age of claims
Recovery System for Company Funds
Phase One
Upon initiating Phase One, swift action is taken to address non-payment. Within 24 hours of account placement, a multi-faceted approach is launched:
- A series of four letters is dispatched via US Mail to the debtor.
- Comprehensive skip-tracing and investigation are conducted to secure optimal financial and contact data.
- Persistent contact efforts ensue, utilizing phone calls, emails, text messages, and faxes.
Daily attempts to engage with the debtor span the initial 30 to 60 days, aiming for a prompt resolution. In the event of unyielding non-compliance, the process escalates seamlessly to Phase Two, involving our network of affiliated attorneys.
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. Immediate action is taken to assert the seriousness of the situation to the debtor. The attorney drafts a series of demand letters and initiates contact through phone calls, leveraging the weight of legal letterhead to prompt a resolution.
If these intensified efforts do not yield payment, a detailed report is prepared for the client. This report outlines the challenges encountered and provides a clear recommendation for Phase Three. The decision to proceed is then in the hands of the client, with the following options:
- Withdraw the claim with no further obligation.
- Continue standard collection activities.
- Advance to litigation, understanding the associated costs.
The choice made at this juncture is critical, as it could either lead to recovery or closure of the case without further financial burden.
The table below summarizes the potential upfront legal costs should litigation be pursued:
| Jurisdiction | Estimated Legal Costs |
|---|---|
| Debtor’s Local | $600.00 – $700.00 |
Clients are advised to weigh the costs against the likelihood of successful recovery, as well as the age and value of the account, before making a decision.
Phase Three
Upon reaching Phase Three, the path forward hinges on the feasibility of fund recovery. If prospects are dim, we advise case closure, incurring no cost to you. Conversely, should litigation seem viable, a pivotal decision awaits.
Choosing not to litigate allows for claim withdrawal, free of charge. Alternatively, persisting with standard collection efforts is an option. Opting for legal action necessitates upfront costs, typically $600-$700, based on the debtor’s location. These costs cover court expenses and filing fees, initiating a lawsuit to reclaim the owed sum and related expenses.
Should litigation prove unsuccessful, the case concludes without further financial obligation to our firm or affiliated attorney.
Our fee structure is straightforward and competitive, adjusting rates based on claim volume and age. Here’s a snapshot:
-
For 1-9 claims:
- Under 1 year: 30%
- Over 1 year: 40%
- Under $1000: 50%
- With attorney: 50%
-
For 10+ claims:
- Under 1 year: 27%
- Over 1 year: 35%
- Under $1000: 40%
- With attorney: 50%
These percentages reflect the contingent fee from the amount collected, ensuring our interests align with your successful fund recovery.
Frequently Asked Questions
What is the Recovery System for Company Funds?
The Recovery System for Company Funds consists of three phases aimed at recovering outstanding debts from debtors.
What happens in Phase One of the Recovery System?
In Phase One, letters are sent to debtors, skip-tracing and investigation are conducted, and attempts to contact debtors are made to resolve the matter.
What is the process in Phase Two of the Recovery System?
In Phase Two, the case is forwarded to an affiliated attorney who drafts letters and contacts the debtor to demand payment.
What are the options in Phase Three of the Recovery System?
In Phase Three, the options include closing the case if recovery is unlikely, proceeding with litigation at the client’s decision, or continuing standard collection activities.
What are the costs associated with legal action in Phase Three?
Clients are required to pay upfront legal costs for litigation, such as court fees, filing fees, ranging from $600.00 to $700.00 depending on the jurisdiction.
What are the collection rates for debts in the Recovery System?
The collection rates vary based on the number of claims submitted and the age and amount of the accounts, ranging from 27% to 50% of the amount collected.
