If the amount owed exceeds the limitations for Small Claims Court in your area, or you simply don’t want to handle the situation on your own, then hiring an attorney may be your best answer. Many attorneys can easily handle collections cases, but where possible, hire someone that specializes in collection law, such as attorneys from these Springfield law firms:
Martin & Associates, PC
Krebs Law Firm, LLC
Evans & Green LLP (whom I have dealt with personally in my experience as a collections attorney’s legal assistant).
It is important that you know upfront that a collections attorney will either take a percentage of what they collect (usually around 25%) or will charge you an hourly rate. However, unlike with a collections agency, some of your attorney fees can be offset, if you took the correct steps in your initial agreement with the client.
If your agreement stipulates that the client would be responsible for attorney fees should a lawsuit be necessary, then you will be able to collect reasonable attorney fees (usually 15% of the debt) as a part of your judgment. This an advantage to hiring an attorney yourself. Collection agencies will not pursue a judgment without hiring an attorney, and, if they do so, your fees would not be reimbursed.
Collections attorneys file a Petition in the Associate/Circuit Court of the county where the debtor resides, such as the Greene County Circuit Court. The debtor is then served with a summons to appear in court. If they do not appear, the a judgment is entered against them automatically. If they do appear and admit to owing the debt, a judgment is still entered. Only if the debtor disputes the debt in court will the case go to trial, and it has been my experience that only 10-20% of the cases do so. Even if the case goes to trial, it is likely that you will still get a judgment against the debtor, especially if you have a contract and a paper trial to prove your case.
It is also much easier for an attorney to collect the debt once a judgment is entered. They have the means to file a garnishment on the debtor’s wages, bank account, even business. They can also file a lien against real estate the debtor owns or confiscate personal property, such as a vehicle, as payment for the debt. These options are not readily available to you if you have a judgment through small claims court.
An attorney will do everything legally possible to collect every last penny of what is owed to you, and then some, such as attorney fees and interest. They will do all the work, including the demand letter, and you will be free to continue business without the added burden of trying to collect an unpaid debt. It has been my experience that an attorney can provide the best results in the shortest amount of time.
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Always consult with an attorney before pursuing any debt collection strategy. The opinions in this article are not to be taken as official guidance but rather as an informational supplement to your overall debt collection strategy.