When clients break payment agreements, chemical manufacturers face the challenge of recovering company funds. This can involve a multi-phase recovery system, legal action, and decision-making processes. Here are the key takeaways from the recovery process for chemical manufacturers:
Key Takeaways
- Implement a multi-phase recovery system to initiate the process of recovering company funds.
- Consider legal action and attorney involvement as a strategic step in the recovery process.
- Make informed recommendations and explore recovery options based on a thorough investigation of the case and the debtor’s assets.
- Understand the implications and costs associated with proceeding with legal action, including upfront legal costs and collection rates.
- Be prepared to make decisions regarding the pursuit of debt recovery, closure of the case, or continuation of standard collection activities.
Recovery System for Company Funds
Phase One: Initial Recovery Steps
Upon a client’s breach of payment agreement, immediate action is crucial. Within 24 hours of account placement, a multi-channel communication strategy is deployed. This includes the dispatch of the first of four letters and comprehensive skip-tracing to update debtor information.
- Daily attempts to contact the debtor via phone, email, and fax are made for the first 30 to 60 days.
- If these attempts fail to yield a resolution, the case escalates to Phase Two.
The goal is to secure a resolution swiftly and efficiently, minimizing the need for further legal action.
Should the initial recovery steps prove unsuccessful, the transition to legal proceedings is seamless, ensuring that your company’s interests remain protected at every stage.
Phase Two: Legal Action and Attorney Involvement
Once internal recovery efforts falter, the baton is passed to legal professionals. Attorneys step in, brandishing the weight of the law. Their arsenal includes demand letters on legal letterhead and persistent phone calls aimed at settlement. If these efforts hit a wall, a decision looms: to litigate or not.
Litigation is a double-edged sword. It promises resolution but demands upfront costs—court fees, filing charges, typically between $600 to $700. These are the stakes for entering the legal arena.
Should you choose to proceed, a lawsuit is filed, seeking not just the overdue amount but also the costs incurred in this legal pursuit. If litigation doesn’t pan out, the case is closed, with no further financial obligations to the firm or attorney.
Here’s a snapshot of potential costs and recovery rates:
| Claims Quantity | Account Age | Recovery Rate |
|---|---|---|
| 1-9 Claims | < 1 year | 30% |
| 1-9 Claims | > 1 year | 40% |
| 1-9 Claims | < $1000 | 50% |
| 10+ Claims | < 1 year | 27% |
| 10+ Claims | > 1 year | 35% |
| 10+ Claims | < $1000 | 40% |
The choice is yours. Withdraw and owe nothing, or forge ahead with the legal process, backed by a firm that adjusts its rates based on the volume and age of claims.
Phase Three: Recommendations and Recovery Options
When the initial recovery and legal avenues have been exhausted, it’s time to consider the final recommendations and recovery options. Decisive action is crucial at this juncture to minimize losses and conclude the matter efficiently.
- Closure of the Case: If the likelihood of recovery is low, we advise to close the case. This incurs no additional cost to you.
- Litigation: Should litigation be recommended, you face a critical decision. If you opt not to pursue legal action, you can withdraw the claim at no cost. Alternatively, standard collection activities can continue.
If you choose to litigate, upfront legal costs will apply. These typically range from $600 to $700, depending on the debtor’s jurisdiction.
Our fee structure is designed to align with your recovery success. Below is a summary of our rates based on the age and amount of the claim, as well as the number of claims submitted:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed Claims |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Remember, the goal is to recover what is owed to you while managing the costs involved. Weigh the options carefully and choose the path that best suits your company’s interests. Persistence and a clear strategy are your allies in this final phase.
Frequently Asked Questions
What are the upfront legal costs if I decide to proceed with legal action?
If you decide to proceed with legal action, you will be required to pay the upfront legal costs such as court costs, filing fees, etc. These fees typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction.
What are the recovery options if the possibility of recovery is not likely?
If, after a thorough investigation of the facts surrounding the case and of the debtor’s assets, we determine the possibility of recovery is not likely, we will recommend closure of the case. You will owe nothing to our firm or our affiliated attorney for these results.
What are the rates for collection based on the number of claims submitted?
DCI provides competitive collection rates tailored to the number of claims submitted within the first week of placing the first account. Rates depend on the age and amount of the accounts, as well as whether the accounts are placed with an attorney.
What happens if all attempts to resolve the account fail in Phase One?
If all attempts to resolve the account fail in Phase One, the case will be immediately forwarded to one of the affiliated attorneys within the debtor’s jurisdiction as part of Phase Two.
What are the recovery options if I decide not to proceed with legal action?
If you decide not to proceed with legal action, you will have the option to withdraw the claim and owe nothing to our firm or our affiliated attorney. You may also choose to allow us to continue to pursue the debtors with standard collection activity.
What happens if the attempts to collect via litigation fail?
If our attempts to collect via litigation fail, the case will be closed and you will owe nothing to our firm or our affiliated attorney.
