If internal efforts have failed to resolve a debt issue, it may be time to call in a professional. But what type of professional should you choose? A collection attorney or a collection agency.
Many companies will start with the latter in the hopes that legal action can be avoided. For the most part, these collection agencies will take many of the same actions against the debtor that you may have already taken. They often start with a series of letters and then move to phone contact if the initial letters are not effective. However, the third-party power that collection agencies exhibit combined with specialized phone systems, software, and training often make them more efficient and cost-effective at collecting on delinquent accounts.
Agencies are often chosen over collection attorneys because of the costs and the negative image that are associated with using legal action.
This being said, the costs for collection services can vary greatly depending on the volume of accounts being submitted, the average size of an account, and the existing age of the accounts. Most collection agencies work on a percentage basis where they only earn fees only on what they collect, while others offer flat-fee pricing such as Transworld Systems. While the pay-for-performance model seems more appealing, most agencies that work on a percentage basis need to charge high percentages and are typically only motivated to collect on larger and easier to resolve accounts.
If your portfolio of bad debt consists mainly of extremely delinquent accounts with high balances, and you have already exhausted other means, using a collection attorney may be your best course of action.
Because debt collection attorneys can force a slow paying individual or company into court, they often exhibit more power than a collection agency. However, the costs involved can often make this prohibitive unless the balances to be collected are high. Most collection attorneys charge an hourly fee, collect at least one-third of the amount recovered, or both. They usually charge a minimum fee or may require a minimum amount of debt. Plus, payment to the attorney is typically in addition to any court-related fees and charges connected with a lawsuit, if you decide to pursue a judgment in court.
As such, most companies refer debt to a collection agency first, and then turn to an attorney if the agency is unable to make headway. Of course, the goal of most companies is to avoid these issues altogether and if one is dealing with smaller balances, neither option is often real viable.
GreenFlag Profit Recovery by Transworld Systems was designed to help businesses of all sizes reduce the need for traditional collection agencies and attorneys. Our proactive approach to debt collection delivers the power of 3rd party intervention while allowing our clients to maintain complete control. The proven system complies with FDCPA guidelines and has been thoroughly tested to achieve optimal results.
Transworld Systems collected over 2.4 billion in the past 5 years for more than 60,000 clients. Our proven techniques will help your business get the money its owed without losing its customer base from overly aggressive techniques. Read more on the GreenFlag Profit Recovery System.
Call Sam J. Banda at 866-629=9092 for a quick analysis of your Accounts receivables.
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