Chances are, your company has dealt with a debtor on at least one occasion. Getting money owed from clients and business partners is a very important part of keeping a business running. However, it is inevitable that you will come across a debtor who won’t respond to your calls, letters, and emails to pay back the money they owe you.
Before turning to an attorney or collection agency (who charge money for their services), you should exhaust all of your options first. Make phone calls, send letters, and try to restructure payment with your debtor if at all possible. Once you have done all you can possibly do and still have issues with payment, it may be time to look for some outside help.
Debt collection agencies and attorneys licensed in commercial debt collection essentially do the same thing—use their resources to secure the payment of debts. However, both options have different tools at their disposal to do so.
Typically, it is always a good idea to get outside counsel from an attorney. They can look at the amount of debt, the history of the debtor, and inform you on the most cost-effective way to obtain recovery. Lawyers can also write demand letters on legal stationary to send to debtors, which sounds minuscule, but can go a long way. Commercial collection lawyers have several judicial avenues to obtain recovery that collection agencies do not. They can obtain a judgment that legally binds a debtor to pay a certain amount. They can then utilize liens, writs of execution, garnishments, and the like to secure repayment.
Debt collection agencies on the other hand, are likely to use many of the same tactics your company can use to obtain payment. However, they have advanced and automated systems dedicated to successfully securing recovery—that’s why they are in business. There are also a wide variety of collection agencies that specialize in certain businesses and types of debt and tend to be more inexpensive than hiring an attorney.
When trying to get repayment of commercial debt, exhaust all of your options first. If you are still unsuccessful, do your research and determine if a commercial collection attorney or a collection agency is the best fit for your budget and business.
The attorneys at Powers Taylor are well-versed in the recovery of commercial debt owed to companies. We evaluate each case individually and advise you on the best path to get you maximum recovery. Learn more about our commercial collection practice here.