When it comes to collecting unsettled bills in commercial property leasing, having a strategic recovery system in place is crucial. This article will delve into the Recovery System for Company Funds and provide recommendations for dealing with unsettled bills. Let’s explore the key takeaways from this discussion:
Key Takeaways
- Understand the 3-phase Recovery System for Company Funds
- Consider the options of closure or litigation for unsettled bills
- Be aware of the legal action costs involved in pursuing unsettled bills
- Know the rates and fees associated with the recovery process
- Stay informed about the collection rates based on the number and age of claims
Recovery System for Company Funds
Phase One
Within the first 24 hours of initiating Phase One, a multi-faceted approach is deployed to secure company funds. Immediate action is taken to send out the initial demand letter, and the debtor’s information is rigorously skip-traced. The goal is to gather the most accurate financial and contact details.
- The first of four letters is dispatched via US Mail.
- Comprehensive skip-tracing and investigation commence.
- Persistent contact attempts through calls, emails, texts, and faxes.
Daily attempts to reach a resolution are made for the first 30 to 60 days. If these efforts do not yield results, the process transitions seamlessly to Phase Two, involving our network of affiliated attorneys. The efficiency of this phase is critical to the overall success of the recovery system.
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. This marks a critical shift in the recovery process, as the attorney’s involvement adds a layer of seriousness to the demand for payment. The steps taken include:
- Drafting and sending a series of authoritative letters on law firm letterhead.
- Persistent attempts to contact the debtor via phone, reinforcing the urgency of the situation.
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 consider alternative actions.
The involvement of legal counsel signifies a pivotal point in the recovery process, often prompting debtors to settle their obligations to avoid further legal consequences.
Phase Three
Upon reaching Phase Three, the path forward hinges on the viability of recovery. A meticulous review of the debtor’s assets and case details will lead to a pivotal recommendation. If prospects are dim, closure is advised, sparing you further costs. Conversely, the choice to litigate propels you to a decision point.
Should litigation be the course, upfront legal fees are inevitable. These typically span from $600 to $700, depending on jurisdiction. This investment authorizes our affiliated attorney to aggressively seek recompense through the courts.
The outcome of litigation, whether fruitful or not, concludes our involvement with no additional fees owed. Below is a summary of our fee structure based on the number of claims and other factors:
| Claims Submitted | Age of Account | Fee Percentage |
|---|---|---|
| 1-9 | Under 1 year | 30% |
| 1-9 | Over 1 year | 40% |
| 1-9 | Under $1000 | 50% |
| 10+ | Under 1 year | 27% |
| 10+ | Over 1 year | 35% |
| 10+ | Under $1000 | 40% |
Note: Accounts placed with an attorney incur a 50% fee on the amount collected, irrespective of the number of claims.
Recommendations for Unsettled Bills
Closure of the Case
When the recovery process reaches a standstill, and the likelihood of collecting unsettled bills becomes bleak, closure of the case may be the most prudent course of action. This decision is not made lightly; it follows an exhaustive review of the debtor’s assets and the facts of the case. If closure is recommended, clients can rest assured that no further fees will be owed for the efforts made.
Closure does not necessarily mean the end of all efforts. Clients have the option to continue standard collection activities, such as calls and emails, or to withdraw the claim entirely without incurring additional costs. It’s a strategic decision, allowing for the conservation of resources when further action is unlikely to yield results.
The decision to close a case is a strategic move to conserve resources and avoid unnecessary expenditures when the probability of recovery is low.
The fee structure for closed cases is straightforward and contingent on the outcome:
- No recovery, no fee: Clients owe nothing if the case is closed after diligent attempts.
- Continued efforts: Standard collection activities can persist at no extra charge.
Litigation Decision
When the moment arrives to decide on litigation, the choice is stark: to sue or not to sue. Weighing the potential for recovery against the costs and risks is crucial. If the decision is to forgo legal action, you may withdraw the claim at no cost, or opt for continued pursuit through standard collection activities.
If litigation is the path chosen, be prepared for upfront legal expenses. These typically range from $600 to $700, depending on the debtor’s jurisdiction. Upon payment, our affiliated attorney initiates the lawsuit for the full amount owed, inclusive of filing costs.
The decision to litigate should be made with a clear understanding of the financial implications and the likelihood of successful recovery.
Consider the following rates for collection, which vary based on the age and size of the account, and the number of claims:
- Accounts under 1 year: 30% (1-9 claims) or 27% (10+ claims) of the amount collected.
- Accounts over 1 year: 40% (1-9 claims) or 35% (10+ claims) of the amount collected.
- Accounts under $1000.00: 50% of the amount collected.
- Accounts placed with an attorney: 50% of the amount collected.
These rates are competitive and tailored to the specifics of your case, ensuring that the decision to proceed with litigation is both informed and strategic.
Legal Action Costs
When considering legal action, it’s crucial to weigh the financial implications. Boldly confronting the costs upfront can prevent unexpected financial strain. Legal fees typically range from $600 to $700, depending on the debtor’s jurisdiction, covering court costs, filing fees, and related expenses.
Before proceeding, ensure a clear understanding of the potential expenses:
- Court costs and filing fees
- Attorney fees
- Potential additional charges for extended litigation
Remember, these costs are an investment towards recovering your funds. If litigation proves unsuccessful, the case is closed, and you owe nothing further to the firm or affiliated attorney.
Frequently Asked Questions
What is the Recovery System for Company Funds?
The Recovery System for Company Funds consists of three phases: Phase One involves sending letters to debtors, skip-tracing, and contact attempts. Phase Two includes forwarding the case to an affiliated attorney for further 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 fees owed to the firm or affiliated attorney.
What are the options if litigation is recommended in Phase Three?
If litigation is recommended in Phase Three, the client can choose to proceed with legal action by paying upfront legal costs or opt to withdraw the claim with no fees owed. The legal costs typically range from $600.00 to $700.00.
What are the collection rates for DCI based on the number of claims submitted?
DCI provides competitive collection rates based on the number of claims submitted. Rates vary depending on the age and amount of the accounts, ranging from 27% to 50% of the amount collected.
What actions are taken in Phase One of the Recovery System?
Phase One of the Recovery System involves sending letters to debtors, skip-tracing, investigating, contacting debtors through various methods, and attempting to resolve the matter within the first 30 to 60 days.
What occurs in Phase Two of the Recovery System?
Phase Two of the Recovery System includes forwarding the case to a local attorney within the network, drafting demand letters, contacting debtors via phone calls and letters, and providing recommendations for the next steps if attempts to resolve the account fail.
