Delayed payments in corporate litigation settlements can be a challenging issue to navigate. In this article, we will explore a Recovery System for Company Funds that consists of three phases aimed at recovering funds owed to your company.
Key Takeaways
- The Recovery System for Company Funds includes three phases: Phase One, Phase Two, and Phase Three with specific actions and recommendations at each stage.
- In Phase Three, the recommendation may involve closing the case if recovery is unlikely or proceeding with litigation. Costs and options for legal action are outlined, with rates for collection services provided.
- DCI offers competitive collection rates based on the number of claims submitted and the age and amount of the accounts. Rates vary for different scenarios such as accounts under 1 year in age, accounts over $1000, and accounts placed with an attorney.
- Phase One of the Recovery System involves initial contact with debtors, skip-tracing, and attempts to resolve the matter. If unsuccessful, the case progresses to Phase Two where it is forwarded to affiliated attorneys for further action.
- Phase Two includes drafting demand letters and contacting debtors to seek payment. If all attempts fail, recommendations for the next steps are provided to the client.
Recovery System for Company Funds
Phase One
Upon initiating Phase One, swift action is taken to signal the seriousness of the debt recovery process. Within 24 hours of account placement, a multi-channel communication strategy is deployed. Debtors receive the first of four letters, while our team conducts skip-tracing and thorough investigations to uncover optimal financial and contact information.
Daily attempts to engage the debtor through phone calls, emails, text messages, and faxes are standard for the first 30 to 60 days. This aggressive approach is designed to facilitate a prompt resolution. Should these efforts not yield the desired outcome, the transition to Phase Two is immediate, involving our network of affiliated attorneys.
The goal is clear: establish contact, communicate urgency, and secure a resolution. If this phase does not lead to a settlement, it sets the stage for a more forceful legal approach.
The initial phase is critical, as it lays the groundwork for the subsequent steps in the recovery system. Here’s a snapshot of the initial actions taken:
- Sending the first letter via US Mail
- Conducting skip-tracing and investigations
- Making daily contact attempts
Failure to resolve the debt in this phase leads to a seamless handoff to our legal team, ensuring no momentum is lost in the pursuit of funds owed to the company.
Phase Two
Upon escalation to Phase Two, the focus shifts to intensified legal pressure. The assigned attorney drafts a series of demand letters and initiates direct contact attempts. Despite these efforts, some debtors remain unresponsive. At this juncture, a critical decision awaits: to proceed with litigation or not.
The choice to litigate is significant, involving upfront legal costs and the potential for further action. It’s a calculated risk, balanced against the likelihood of recovery.
If litigation is deemed the right course, the following costs are typically expected:
- Court costs
- Filing fees
These expenses range from $600 to $700, depending on the debtor’s jurisdiction. A lawsuit is then filed to recover all monies owed, inclusive of filing costs. Should litigation efforts not yield results, the case is closed with no additional fees owed to the firm or affiliated attorney.
The decision to litigate is pivotal, with financial implications and the potential to set a precedent for future dealings. It’s a step taken with due consideration of all factors at play.
Phase Three
Upon reaching Phase Three, the path forward becomes clear. The outcome of our comprehensive investigation into the debtor’s assets and the surrounding facts will lead to one of two recommendations.
- If recovery appears unlikely, we advise case closure with no fees owed to our firm or affiliated attorney.
- Should litigation seem viable, a decision point arrives.
Choosing not to litigate allows for claim withdrawal or continued standard collection efforts—calls, emails, faxes—without cost. Opting for legal action necessitates upfront legal costs, typically $600-$700, based on the debtor’s jurisdiction. These funds enable our attorney to pursue all owed monies, including litigation costs. Failure to collect post-litigation results in case closure, again with no fees owed.
Our competitive collection rates are tailored to the volume and age of claims, ensuring fairness and transparency.
Here’s a quick glance at our rate structure:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
In summary, Phase Three is about making informed decisions based on the likelihood of recovery and the associated costs, with a clear understanding of potential financial obligations.
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 contacting debtors. Phase Two includes forwarding the case to an affiliated attorney for legal action. Phase Three involves recommendations for further action or closure of the case.
What happens if recovery is not likely in Phase Three?
If recovery is not likely in Phase Three, two options are presented: closure of the case with no owed fees, or proceeding with litigation where upfront legal costs are required. If litigation fails, no fees are owed.
What are the rates for DCI’s collection services?
DCI provides competitive collection rates based on the number of claims submitted. Rates vary for accounts under 1 year in age, over 1 year in age, under $1000.00, and accounts placed with an attorney.
What actions are taken in Phase One of the Recovery System?
Phase One includes sending letters to debtors, skip-tracing, contacting debtors, and attempting to resolve the account through various communication methods like phone calls, emails, and faxes.
What happens in Phase Two of the Recovery System?
Phase Two involves forwarding the case to a local attorney within the network, drafting demand letters, and contacting the debtor for payment. If all attempts fail, a recommendation for the next step is provided.
What are the options if legal action is recommended in Phase Three?
If legal action is recommended in Phase Three, the client can choose to proceed with litigation by paying upfront legal costs or withdraw the claim with no owed fees. Standard collection activities may also continue.
