Managing your company's accounts receivables can be frustrating when certain customers will not pay their bills. After a while, the letters you send and the phone calls you make will get old, especially when there is no response from the customer. This is the point in which you may want to consider hiring a general practice attorney that specializes in collections. Hiring an attorney for help is not your only option, but it is often the best solution for this problem. Here are three reasons to use an attorney over the alternative options.
Attorneys are credible
When your customers receive letters from your company demanding money, they may not take the issue as seriously as they would if they received a letter from an attorney. Attorneys are extremely professional and can come across as intimidating, and these are great reasons to have an attorney helping you collect the debts owed to your company.
When attorneys send demand letters, the customers might decide to pay their bills. One of the main reasons is to avoid legal consequences for failing to pay what they owe.
Demands can easily turn into lawsuits
The second benefit you have from hiring an attorney to help you collect debts is knowing they can easily turn a demand for payment into a lawsuit. When attorneys send demand letters, they will include dates in which the bills must be paid. If the bills are not paid by these dates, the letter will clearly state that a lawsuit will follow.
Because lawyers specialize in lawsuits and disputes, they are able to quickly file a lawsuit to a customer that does not respond by either paying the entire debt or coming up with a payment plan.
This too can benefit your company because once the dispute ends up in court, the person will be forced to pay the debt owed.
An attorney might actually be cheaper
All collection agencies and attorneys have different rate plans and schedules for collections, but there are many times when attorney fees might actually be cheaper than the fees charged by collection agencies. This occurs for two primary reasons:
- The way they charge – Many attorneys charge on contingency, meaning you will only pay a fee if the attorney collects money. Collection agencies, on the other hand, often charge ongoing fees just to handle the accounts you turn over. This means you may have to pay fees even if the agency doesn't collect any money.
- The actual percentage – The average rate attorneys charge to collect debts is 25% to 33% of the debt totals. A collection agency may base the rate on the age of the account, and it could be around 50% of the debt totals.
If you would like to learn more about collection services offered by a general practice attorney, contact one today. You can schedule an appointment or discuss the issue over the phone or in person.