When it comes to getting paid after winning a business lawsuit, there are several important considerations and steps to take. From assessing the viability of recovery to the recovery system phases, each stage plays a crucial role in the successful recovery of funds. This article will delve into the key points to consider at each stage and provide valuable insights for navigating the process effectively.
Key Takeaways
- Thorough investigation of the case is essential for assessing the viability of recovery.
- Evaluation of the debtor’s assets is crucial in determining the likelihood of successful recovery.
- Consider the upfront legal costs associated with proceeding with legal action.
- Phase One involves initial recovery steps such as sending letters to debtors and skip-tracing.
- Phase Two includes the involvement of affiliated attorneys and the drafting of demand letters.
Assessing the Viability of Recovery
Thorough Investigation of the Case
Before moving forward, a thorough investigation is crucial to determine the strength of your case. Evidence is key; without it, the chances of recovery plummet. Here’s what to expect:
- Skip-tracing and in-depth research to uncover debtor’s financial status.
- Daily attempts to contact the debtor for 30 to 60 days.
- Utilization of various communication methods: calls, emails, texts.
The goal is to gather enough information to make an informed decision on the viability of recovery. If evidence suggests a low probability of success, it may be wise to consider case closure to avoid unnecessary expenses.
Evaluation of Debtor’s Assets
After a thorough investigation, the focus shifts to the debtor’s assets. Determining asset solvency is crucial; it influences the likelihood of successful recovery. A debtor’s assets are scrutinized to ensure they are sufficient to cover the claim.
Asset evaluation is not just about quantity but also accessibility and liquidity. Some assets may be encumbered or not easily convertible to cash, affecting recovery efforts.
The evaluation process is a critical step that informs the decision on whether to proceed with litigation or to close the case.
Here’s a snapshot of potential recovery rates based on the age and size of the account:
| Age of Account | Amount Under $1000 | Amount Over $1000 |
|---|---|---|
| Under 1 year | 50% | 30% |
| Over 1 year | 50% | 40% |
These rates are indicative and may vary depending on the number of claims and other factors.
Recommendation for Case Closure
When recovery seems unlikely, a closure of the case may be the most prudent course of action. Deciding to close a case is a significant step, one that concludes efforts after evaluating all possible avenues for debt recovery. This decision is made with the client’s best interest in mind, ensuring no further resources are wasted.
Closure is recommended when the cost of pursuing the debt outweighs the potential recovery.
The closure process is straightforward:
- Review the thorough investigation findings.
- Assess the debtor’s asset evaluation.
- Consider the likelihood of successful recovery.
If closure is advised, clients are relieved from any financial obligations to our firm or affiliated attorneys for these efforts. This allows businesses to redirect their focus and resources towards more viable pursuits.
Considerations for Legal Action
Decision to Proceed with Legal Action
Once the decision to litigate is made, the financial commitment begins. Upfront legal costs are unavoidable and necessary to initiate the lawsuit. These costs cover court fees, filing charges, and other related expenses. Typically, you can expect to pay between $600 to $700, depending on the jurisdiction of the debtor.
Payment of these fees signifies the start of a legal pursuit for the recovery of all monies owed. This includes the initial investment for filing the action. Should litigation efforts not result in recovery, rest assured, you owe nothing further to the firm or the affiliated attorney.
The choice to proceed with legal action is a pivotal moment in the recovery process. It sets into motion a series of strategic steps aimed at securing your rightful dues.
Consider the following rates, which vary based on the number of claims and age of accounts:
- For 1-9 claims, accounts under 1 year: 30% of the amount collected.
- Accounts over 1 year: 40%.
- Accounts under $1000: 50%.
- Accounts placed with an attorney: 50%.
For 10 or more claims:
- Accounts under 1 year: 27%.
- Accounts over 1 year: 35%.
- Accounts under $1000: 40%.
- Accounts placed with an attorney: 50%.
Options for Withdrawal of Claim
Withdrawing a claim is a strategic decision that may arise during the litigation process. Consider the implications carefully before deciding to pull back. If you opt out of legal action after the initial assessment, no fees will be owed to the firm or affiliated attorneys.
Withdrawal might be the best course if the likelihood of recovery is low, saving you from unnecessary expenses and time.
However, if you choose to continue with standard collection activities, such as calls and emails, these efforts will persist in an attempt to resolve the debt. Below is a summary of potential actions:
- Review the recommendation for case closure or litigation.
- Decide to withdraw the claim with no financial obligation.
- Continue with standard collection activities without legal proceedings.
Remember, the choice to withdraw should be based on a comprehensive evaluation of the debtor’s assets and the overall chances of successful recovery.
Upfront Legal Costs
Before initiating legal action, it’s crucial to understand the financial implications. Upfront legal costs are a necessary consideration, as they encompass court costs, filing fees, and other related expenses. These fees typically range from $600 to $700, depending on the debtor’s jurisdiction.
When you commit to litigation, these costs are your responsibility. Upon payment, our affiliated attorney will take the necessary steps to file a lawsuit on your behalf.
It’s important to weigh these costs against the potential recovery. Here’s a breakdown of possible fees:
- Court costs
- Filing fees
- Attorney’s initial retainer
Failure to consider these costs can lead to unexpected financial strain. Ensure you have a clear understanding of all expenses before proceeding.
Recovery System Phases
Phase One: Initial Recovery Steps
Within the first 24 hours of initiating Phase One, a multi-pronged approach is set in motion to secure payment from the debtor. Immediate action is critical, and our team ensures that no time is wasted. A series of four letters is dispatched via US Mail, marking the beginning of a persistent communication strategy.
Skip-tracing and in-depth investigations are conducted to gather the most accurate financial and contact information. Our collectors engage in relentless pursuit, utilizing phone calls, emails, text messages, and faxes to reach a resolution.
Daily attempts are made to contact the debtor during the initial 30 to 60 days. Should these efforts not yield the desired outcome, the case seamlessly transitions to Phase Two, involving our network of affiliated attorneys.
The effectiveness of Phase One is evident in the preparation and pressure applied, setting the stage for potential legal action if necessary. The goal is to resolve the matter expediently, without the need for further escalation.
Phase Two: Involvement of Affiliated Attorneys
Once a case enters Phase Two, the strategy intensifies. An affiliated attorney within the debtor’s jurisdiction takes over, wielding the weight of legal letterhead to demand payment. Immediate action is critical:
- Drafting and dispatching demand letters.
- Persistent attempts to contact the debtor via phone.
If these efforts falter, a candid assessment follows. Communication is key, and you’ll receive a detailed explanation of the hurdles faced and the recommended course of action.
The transition to legal representation marks a pivotal moment in the recovery process, where the stakes are higher and the approach, more assertive.
Should Phase Two prove unfruitful, the path ahead bifurcates: either recommend case closure or escalate to litigation. The choice is yours, with clear guidance provided every step of the way.
Phase Three: Recommendations and Recovery Rates
At the culmination of our efforts, we arrive at a critical juncture: recommendation and recovery. Our advice hinges on the feasibility of asset recovery. If prospects are dim, we advocate for case closure, sparing you further expense. Conversely, should litigation seem promising, you face a pivotal choice.
Should you opt against legal action, withdrawing is simple and incurs no cost. Alternatively, persisting with standard collection tactics remains an option. However, choosing litigation necessitates upfront costs, typically between $600 to $700, based on the debtor’s locale.
Our recovery rates are competitive and vary with claim volume and age. Here’s a snapshot:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Decisiveness is key. Whether to proceed or withdraw, the choice is yours, with our full support guiding you towards the most judicious financial outcome.
Frequently Asked Questions
What are the upfront legal costs for proceeding with legal action?
The upfront legal costs for proceeding with legal action typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction.
What happens if the recommendation is litigation and I decide not to proceed with legal action?
If the recommendation is litigation and you decide not to proceed with legal action, you have the option to withdraw the claim, and you will owe our firm or our affiliated attorney nothing. You may also choose to allow us to continue to pursue the debtors with standard collection activity (calls, emails, faxes, etc.)
What are the recovery rates for debts collected through litigation?
The recovery rates for debts collected through litigation depend on the age and amount of the accounts. Rates range from 27% to 50% of the amount collected, depending on the specific criteria.
What are the initial recovery steps in Phase One of the Recovery System?
The initial recovery steps in Phase One include sending letters to the debtor, skip-tracing and investigation of debtors, and attempting to contact the debtor to resolve the matter using various communication methods.
What actions are taken in Phase Two of the Recovery System?
In Phase Two, the case is forwarded to an affiliated attorney who will draft letters to the debtor and attempt to contact the debtor via telephone. If all attempts fail, a letter will be sent explaining the issues surrounding the case and the recommended next steps.
What are the recommendations for Phase Three of the Recovery System?
The recommendations for Phase Three depend on the investigation results. If recovery is not likely, closure of the case will be recommended with no owed fees. If litigation is recommended, the decision to proceed with legal action or withdraw the claim will be presented along with the associated costs.
