A debt recovery lawyer will understand his or her clients’ worries when it comes to their debt settlement prospects. One of these worries could be that hiring a debt recovery lawyer will cost too much, which could make some people turn to a debt collector instead.
However, you should be aware of some factors before contacting a debt collector. I will discuss reasons why you should hire a Debt Recovery Lawyer instead of a Debt collector.
Before we get into that proper, maybe it would be helpful for me to clarify what is called a debt recovery case in the first place. You may be shocked to discover that not all requests for money are debt recovery claims.
What is a Debt Recovery Case?
A debt recovery case is one when there is a clear-cut debt due. Examples of this include a friendly loan (“IOUs”) or when you are a supplier being owed money for products you have provided.
On the other hand, if it is a breach of contract lawsuit where the opposing party is contesting whether it even owes you money, then this cannot be called a debt recovery action.
What kind of lawyer do I need for debt collection
You definitely need the service of a debt collection attorney, who is a professional who can help you establish legal approaches for recovering debts from non-paying debtors. They usually assist you with filling out and filing documents, and if your case goes to court, they will usually defend you in court.
On the other hand, some debt collection lawyers choose to defend debtors over creditors. Attorneys seek to defend people who are being sued in these situations. Just find a debt collection lawyer near you, for easy access and collaboration.
Your next question might be “how much does a debt collection attorney cost?” Well, there isn’t a fixed price. It depends on your location and the amount to be recovered.
How much does a debt collection attorney cost?
In general, these costs range from $575 for debt under $10,000 to $900 for cases above $10,000. In addition to these upfront fees, you may expect to be paid a fee that is calculated based on the amount actually collected — generally 33 percent — and is dependent on your case being successful.
A contingency fee is what it’s called. While your up-front fees are required and payable whether you win or lose, the fact that the majority of your attorney fee is reliant on winning your case and is based on a percentage of the amount of your victory makes pursuing your debt collection claim easier and less financially Stressful.
Now, let me explain why employing a debt recovery lawyer may be a better choice than going to a debt collector yourself.
1. A debt recovery lawyer can offer you a realistic evaluation of your case
A realistic evaluation of your case is of the greatest significance, since it will assist you in evaluating your choices and planning your future steps intelligently.
While the typical method of debt recovery is to send the debtor a letter of demand (LOD), followed by a Writ of Summons if the debtor does not pay up, and then getting a court judgment for the debt to be enforced on the debtor, the best approach ultimately relies on your particular circumstances.
For me, I make it a point to offer a rapid, swift, and specific evaluation of my client’s problems to allow us to decide on the best course of action.
One of the most important concerns is whether the debt is even worth recovering, depending on the idea of Return of Investment (ROI) (ROI). This essentially quantifies the number of returns you receive, compared to the expenses of getting that return.
If, for instance, starting legal procedures will be excessively prohibitive in terms of expenses, keeping in view the amount of debt you are claiming, it may not be advisable to initiate legal proceedings to collect your debt.
Therefore before you employ a debt collector to collect on your debt, consider engaging a debt recovery lawyer. He or she will be able to go over with you the essential issues and choices and advise on the best approach for you.
2. Better transparency of fees
My price structure for a debt recovery case is simple and transparent – a set charge for each step.
In this manner, you as a customer may be guaranteed of the costs and have one less concern when attempting to collect your debt. I do not charge hourly rates because I have a comprehensive knowledge of the amount of labour needed for debt recovery cases and can accurately predict how much I should charge for the whole procedure.
On the other hand, most debt collectors charge a percentage of the debt they are trying to collect. For older debts, some debt collection companies can ask for a much higher rate of commission, while others may need money up front.
This has created dissatisfaction and difficulties since some debt collectors vanish after collecting money, resulting in little or none of the debts collected.
If you would like to employ a debt collector, I would suggest that you find out how their costs will be pegged and verify that their charge structures are clear. Otherwise, you should hire a debt recovery lawyer.
3. Hiring a debt collector may be hazardous
As a client, you definitely want and need a trustworthy party to assist you to recover your obligations, and this includes the debt collectors you may employ. Thus, you should be aware of some dangers that may come with employing debt collectors.
While there are no explicit rules governing debt collectors, some actions debt collectors may take out to recover a client’s debt may be against the law.
Their acts of mischief included one person kicking a rice cooker and throwing a cash register into the floor. Another member also put different food items into a big pot of soup, ruining the broth.
What kind of lawyer do I need for debt collection?
A Professional Approach
One of the major advantages of hiring a debt recovery lawyer to collect your debts is that they do it properly.
With a lawyer in control, you don’t need to worry about you or your business acquiring a poor image owing to the third party’s methods of collecting money for you. Expect a legal company to bargain on your behalf in a severe but professional manner, without pestering or threatening your debtor.
Consider examining the firm’s accomplishments, years of service in offering debt recovery, and service areas. This will assist you to choose which Law Firm to hire.
How would this impact you, the debt collector’s client?
If debt collectors were to get into problems with the law, it would create additional bother and discomfort for you to recover your debt. As mentioned previously, debt collectors may face prison sentences and heavy penalties for unlawful behavior. If your debt collector is imprisoned, the process of collecting your debt may be delayed.
Additionally, you face the risk of incurring responsibility for employing the agency in the event you are sued for the agency’s actions. This is unless – and you should check this before engaging the debt collector – the debt collection firm has taken out Errors and Omissions Insurance to protect you.
The Big Conclusion
Hopefully, after reading this, you now have a better idea of what engaging a debt recovery lawyer or a debt collector involves. It must be emphasized that being cautious with your choices is of the utmost significance because you would desire a smooth and quick debt recovery procedure.
So, it’s best to do a full evaluation before deciding whether to hire a debt collector or a debt recovery lawyer. You might also want to know why you need to hire a business debt recovery solicitor.