Businesses who have tried to collect on debts from their customers have two primary options to pursue when all their in-house collection options have failed. Company owners can either hire a bill collector or an attorney to chase after their customers for them. There are benefits associated with both types of debt collection efforts.
One primary difference between collections attorneys and bill collectors is what type of actions they can take. A bill collector can make calls, send letters and pursue other debt collection efforts along that vein. Lawyers have a lot more leeway in that respect. They often start by sending letters then escalate the case by filing suit in court if that correspondence goes unanswered. They can request that a judge order wage garnishment or place a lien on a debtor’s property if debts aren’t paid off.
Attorneys and debt collectors also differ in terms of how large a balance must be before one party or the other will take the case on. Collection agencies often are willing to take on collection efforts on smaller balances because they have access to automated calling and other industry-specific software. This allows bill collectors to minimize their overhead costs while trying to collect on debts. Attorneys generally only take on collection efforts for larger balances because they have to figure in litigation fees.
The fee structure that collection attorneys follow if often different from that of bill collectors as well. Lawyers generally take on these cases on a contingency basis. This means that you only pay them if they recover funds for you. Collection agencies often charge a fixed-rate or percentage fee for any monies that they collect.
Debt collection efforts initiated by attorneys tend to be resolved more quickly because debtors tend to take letters from lawyers more seriously than they do bill collectors. Consumers fear the legal ramifications if they don’t get things squared away. If you’re wondering what type of debt collection is best for your Statesville company, then am attorney who has extensive experience in representing North Carolina business owners can help you decide.