THE
LAWS OF CREDIT AND COLLECTIONS
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THE
LAWS OF CREDIT AND COLLECTIONS
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REFER THE ACCOUNT TO A LAWYER OR TO A COLLECTION AGENCY? Before sending the account to a third party, collection attempts should be made by your in-house counsel, if you have in-house attorneys who are familiar with collection work. Our attorneys act like in-house counsel. If we can collect with one letter and several conversations, you will save a lot of money over going to a contingency fee collection agency or law firm. If an account cannot be collected by in-house counsel, how do you decide between a third party on an hourly basis or on a contingency fee basis? If the customer owes less than $10k, a contingency fee collection agency is generally less expensive to use than an hourly law firm. There are exceptions, such as in New York City, where hourly legal fees are high. In such places we send all accounts under $20k to a collection agency. If you don't think that the account is collectible, it might make more sense to send the account o a contingency fee third party, no matter how high the balance due. Some accounts under $10k should be forwarded to an hourly law firm:
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