Legal entities like law firms, independent attorneys and even the district courts regularly need the help of a debt collection agency to recover money from unpaid accounts. People often use the legal services of a lawyer but fall behind in making promised installments. Similarly, district courts often issue summons and notices to make a payment, just to find that these individuals simply do not respond or have moved away from their residence on file.
The main reason that the legal collections activity needs to be outsourced is because engaging own in-house staff for debt recovery is very expensive. Own employees do not have tools and subscription to some critical services required to locate the debtor (skip tracing), send written demands with increasing order of intensity. They find it very hard to regularly follow up with clients for payments in case the debtor has agreed to pay money in installments. They are also not fully trained on the most up to date federal and state debt collection laws involved when trying to recover unpaid bills from defaulters.
Collection agencies are experts in collecting a debt; after all, that is what they do every single business day. Debtors are more inclined to pay off when a collection agency is involved, versus when the notices are issued under the name of the legal entity’s name.
Check this: Cost of hiring a collection agency
The main reason collection agencies are able to send Collection Demands at such a reasonable cost is because they have automated systems and process accounts in bulk. Sending five letters, which includes Scrubs like “Change of Address”, “Bankruptcy Check” and “Litigious Person check” at no additional cost improves the chances of collections also reduces the possibility of being hit by a counter-lawsuit.
Once a debtor does not respond to collection letters, the next steps are Collection Calls or Filing a Lawsuit. These are contingency-based services and involve utilizing advance Skip Tracing services. Non-payment can also lead to reporting the case to a credit reporting agency or followup with cosigners.
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If you need a collections agency to recover money from past-due legal accounts: Contact us