In the realm of long-term chemical supply agreements, the process of collecting on outstanding funds can be complex and challenging. To effectively recover company funds, a strategic approach is essential. This article explores tactics for collecting on long-term chemical supply agreements, focusing on a comprehensive Recovery System consisting of three distinct phases. Each phase plays a crucial role in maximizing the chances of successful fund recovery and minimizing financial losses for the company.
Key Takeaways
- Implement a structured Recovery System with three phases to enhance the chances of recovering company funds effectively.
- Utilize a proactive approach in the initial phase by sending letters to debtors, skip-tracing, and attempting direct contact for resolution.
- Consider escalating to legal action if initial attempts fail, with clear guidelines on the costs and procedures involved in litigation.
- Understand the fee structure for collection services, including rates based on the age and value of accounts submitted.
- Maintain transparency with clients regarding recommendations for case closure or litigation, ensuring informed decision-making for fund recovery.
Recovery System for Company Funds
Phase One
Initiating the recovery process, immediate action is taken within 24 hours of placing an account. The debtor receives the first of four letters, signaling the start of a persistent pursuit. Skip-tracing and investigations are conducted to secure the most accurate financial and contact information.
Efforts to resolve the account include a barrage of communication methods: phone calls, emails, text messages, and faxes. The goal is to establish a resolution swiftly, with our collectors making daily attempts for the first 30 to 60 days. If these efforts do not yield results, the transition to Phase Two is seamless, involving the expertise of our affiliated attorneys.
The urgency of Phase One is critical to set the tone for the recovery process, ensuring that debtors are aware of the seriousness of their situation.
Our fee structure is straightforward and contingent on the age and amount of the claim:
- 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 the number of claims
- Accounts placed with an attorney: 50% regardless of the number of claims
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. The attorney’s immediate action includes drafting a series of demand letters to the debtor, leveraging the weight of legal letterhead to prompt payment. Concurrently, the attorney’s team initiates persistent telephone contact, reinforcing the urgency of the situation.
The goal is clear: to secure payment through increased legal pressure and direct communication.
If these intensified efforts do not yield a resolution, a strategic assessment is conducted. The outcome determines whether to advance to Phase Three or to recommend case closure. The decision hinges on the likelihood of successful recovery versus the potential costs involved.
The following table outlines the fee structure for collections at this stage:
| Claims Quantity | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed Claims |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Each step is meticulously designed to maximize the potential for fund recovery while minimizing unnecessary expenditure.
Phase Three
Upon reaching Phase Three, the path forward hinges on the feasibility of recovery. If prospects are dim, closure is the prudent step, incurring no cost to you. Conversely, opting for litigation necessitates a decision on your part. Should you decline legal action, you may retract the claim without financial obligation, or permit ongoing collection efforts.
Choosing litigation involves upfront legal expenses, generally between $600 to $700. These cover court costs and filing fees, with our affiliated attorney initiating the lawsuit for the full amount due, including filing costs. Failure to collect post-litigation results in case closure, absolving you of further payment.
Our fee structure is competitive and scales with the volume of claims. The rates are contingent on the age of the account, the amount, and whether an attorney is engaged.
Here’s a snapshot of our rates:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Involved |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
The decision to proceed with litigation or to close the case is pivotal, impacting both the strategy and financial outcome. Choose wisely, with the understanding that our team is committed to guiding you through this critical juncture.
Frequently Asked Questions
What is the Recovery System for Company Funds?
The Recovery System for Company Funds is a 3-phase system designed to recover company funds from debtors. Phase One involves sending letters to debtors, skip-tracing, and contacting debtors for resolution. Phase Two includes forwarding the case to affiliated attorneys for legal action. Phase Three involves either closing the case if recovery is unlikely or proceeding with litigation at the client’s decision.
What happens if recovery is not likely in Phase Three?
If recovery is not likely in Phase Three, the case may be recommended for closure, and the client owes nothing to the firm. Alternatively, litigation may be recommended, and the client can choose to proceed with legal action by paying upfront legal costs. If litigation fails, the client owes nothing.
What are the rates for the Recovery System?
The rates for the Recovery System depend on the number of claims submitted and the age of the accounts. Rates range from 27% to 50% of the amount collected, with variations based on account age, amount, and whether accounts are placed with an attorney.
What actions are taken in Phase One of the Recovery System?
In Phase One, letters are sent to debtors, skip-tracing is conducted, and debtors are contacted for resolution. Daily attempts are made to contact debtors for the first 30 to 60 days. If unsuccessful, the case moves to Phase Two.
What happens in Phase Two of the Recovery System?
In Phase Two, the case is forwarded to a local attorney who sends demand letters to the debtor and attempts to contact them. If all attempts to resolve the account fail, the client receives a letter with recommendations for the next steps.
How are legal costs handled in the Recovery System?
If legal action is recommended in Phase Three, the client is required to pay upfront legal costs such as court fees. The fees typically range from $600.00 to $700.00, and if litigation fails, the client owes nothing to the firm.
