If you have a huge stack of unpaid services or fees from your clients, your company might be facing a problem; not enough flow of cash to support your daily operation. If this happens, then you might end up having a big problem.
That is the reason why as a business owner, you should keep a good track of every unpaid service or fee that you have.
As much as you would want to handle the payment yourself, you still need to focus on various other function that needs to be done in your company.
The good part is, you do not need to handle the whole entire payment yourself. You can always hire a debt recovery lawyers to handle this matter for you.
When should you hire a debt recovery lawyer?
Of course, the first step that you have to do is to try to contact the debtor yourself. Try contacting them using e-mail, telephone, or try to set up a meeting with them. Your debtor will be much more likely to cooperate and pay you back if you do not show a sign of hostility.
You can also try to negotiate with your debtor. Some of the debtors might be able to pay you a smaller amount of money over an extended period. If you think that you have gained your revenue only with that half amount and that you do not have the resources to pull or pay a debt recovery lawyer, then this might be a good alternative for you. Of course, this means that you have to do your due diligence to verify the statement that your debtor gave you.
Another reason that it might be better if you try to handle this on your own is that lawyers will cause you a huge amount of money. There will be a minimum fee that is applicable in addition to all the extra charges such as consultation charges, or any court-related fees that might be tied to the case itself.
If your attempt has been ignored studiously by your debtor, then you can choose whether you should hire a debt collector or a lawyer.
Debt collector or debt recovery lawyer
Both of them are essentially third-party companies that you hire to help gain your money back. The difference lies in the method that they would use in order to gain it back.
It is true that collection agencies tend to cause less than a debt recovery lawyer. Agencies have an automated system that follows up with your debtors. There is also so many choices of debt collectors that are available for you to hire. This means you can easily make adjustments and choose according to your business size as well as the budget.
However, the disadvantage that debt collection agencies have over debt recovery lawyers are you are not really sure what is the action that they take to recover your money. Although there has been a law that was recently passed to prohibit debt collection companies from doing anything illegal, you are still not a hundred percent sure with their actions.
Debt recovery lawyer, on the other hand, is much more expensive than a debt collector. However, there are a few advantages that debt recovery lawyers have.
Your lawyer will be able to give you a practical assessment of your case. It helps you in making a judgement and planning your next move. The lawyer will be able to give you a fully comprehensive view of what legal action you should take in order to get your money back.
Even though debt recovery lawyers tend to be more expensive than debt collectors, their fees tend to be more transparent. Dependable on the firm, your debt collectors might charge you an additional amount of fee, or may even take a certain percentage of your money as their fee once they have recovered it successfully.
The most important advantage that your lawyers will have is that they will be able to take legal actions to recover your money back. If you decide to go to court over your case, then your lawyer will be able to file for administrative wage garnishment. This means that you will be able to get your payment back in the form of installment by cutting off a percentage of your debtor’s salary.
You will also be able to seize the property of your debtor if you would like to. This is one advantage that you will have over choosing to hire a debt collection agency.
There are a lot of measures that you can do in order to gain your money back.
When it comes to choosing which one that you would like to hire between a debt collector or a lawyer, then you have to see their track record.
Because hiring a lawyer tend to take a bigger amount of resources rather than hiring a debt collection agency, many companies resort to mixing both of them. Companies can opt to hire a debt collection agency first. If they could get their money from the debt collection agency, then the case would stop there.
However, if they fail, then the company would choose between settling the debt with the debtor, or hiring a lawyer to sue the debtor. There are many decisions that have to be thought over when it comes to hiring a lawyer. Business owners should decide whether it is worth putting a huge amount of resources and whether the amount of debt is worth throwing away those resources. If they do, then they will hire a lawyer.
Even when it comes to lawyers, they would try to solve the problem in a one on one fashion first. Only when it is not effective that they will bring the case to the court.