Small claims and freelancers often face challenges when it comes to ensuring payment for services rendered. In this article, we will explore a 3-phase Recovery System designed to help freelancers and companies recover funds owed to them.
Key Takeaways
- Phase One involves sending letters to debtors, skip-tracing, and attempting to resolve accounts within the first 30 to 60 days.
- Phase Two includes forwarding cases to affiliated attorneys for legal action and demanding payment from debtors.
- Phase Three offers two options: closing the case if recovery is unlikely or proceeding with litigation at the client’s discretion.
- Rates for collection services vary based on the age and amount of the accounts submitted.
- Clients may incur upfront legal costs if they choose to proceed with litigation.
Recovery System for Company Funds
Phase One
Once we take on your case, we hit the ground running. Within 24 hours, we initiate a multi-pronged approach to recover your funds. Our first step is to dispatch a series of demand letters to the debtor, ensuring they understand the seriousness of the situation.
- The debtor’s details are meticulously skip-traced to secure the most up-to-date financial and contact information.
- Our dedicated collectors engage in daily attempts to reach a resolution, employing a mix of communication methods from phone calls to emails.
We’re relentless in our pursuit, with the first 30 to 60 days marked by persistent contact efforts. If these attempts don’t yield results, we’re prepared to escalate to Phase Two, involving our network of skilled attorneys.
Phase Two
Once we escalate to Phase Two, the gears of legal intervention begin to turn. Our affiliated attorneys, armed with the facts of your case, draft and dispatch demand letters to the debtor. These letters carry the weight of legal authority, signaling our serious intent to recover what you’re owed.
Simultaneously, our legal team initiates contact attempts through calls, aiming to negotiate a resolution. Persistence is key; if these efforts don’t yield results, we prepare for the final phase. Here’s a snapshot of our recovery rates and legal costs:
| Claims Submitted | Recovery Rate | Legal Costs |
|---|---|---|
| 1-9 Claims | 30%-50% | $600-$700 |
| 10+ Claims | 27%-35% | $600-$700 |
We stand by our commitment to recover your funds. If Phase Two doesn’t lead to a settlement, we’re ready to advise on the next decisive steps.
Phase Three
At the culmination of our efforts, we face a decisive moment. We must evaluate the feasibility of recovery and choose our next steps wisely. If the odds are against us, we recommend closing the case, sparing you further expense. Conversely, should litigation seem viable, we prepare for court, mindful of the associated costs.
Our rates reflect the complexity and age of the claims, ensuring fairness and transparency. Here’s a quick breakdown:
- For 1-9 claims, rates vary from 30% to 50% of the amount collected.
- For 10 or more claims, the rates range from 27% to 50%.
These percentages are contingent on factors such as the age of the account and whether an attorney is involved. It’s a strategic choice—pursue legal action or continue with standard collection activities.
We stand by our commitment to recover what is rightfully yours, with no hidden fees should we advise closure or if litigation does not succeed.
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 attempting to contact debtors for resolution. Phase Two includes forwarding the case to an affiliated attorney for further action. Phase Three involves either closing the case if recovery is unlikely or proceeding with litigation if recommended.
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 you will owe nothing to the firm or affiliated attorney. Alternatively, if litigation is recommended, you can choose to proceed with legal action by paying upfront legal costs or withdraw the claim with no obligation to pay.
What are the costs involved in legal action in Phase Three?
In Phase Three, if you decide to proceed with legal action, you will be required to pay upfront legal costs such as court fees, filing fees, etc. These costs typically range from $600.00 to $700.00 depending on the debtor’s jurisdiction.
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 within the first week. Rates vary for different types of accounts, such as accounts under 1 year in age, accounts over 1 year in age, accounts under $1000.00, and accounts placed with an attorney.
What actions are taken in Phase One of the Recovery System?
In Phase One, within 24 hours of placing an account, letters are sent to debtors, skip-tracing is conducted, and attempts are made to contact debtors for resolution. If these attempts fail, the case proceeds to Phase Two.
What happens in Phase Two of the Recovery System?
In Phase Two, the case is forwarded to a local attorney within the network. The attorney drafts letters to the debtor, demands payment, and attempts to contact the debtor. If all attempts to resolve the account fail, further recommendations are provided for the next steps.
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