516.543.3277

The Fine Print

LeFebvre Law's blog exploring legal issues related to the small business community, entrepreneurs, contractors, the construction industry, along with occasional pieces about futurism, the commercial space industry and space law, and other emergent technologies and novel legal fields. "Always read The Fine Print!"

The Fine Print

LeFebvre Law's blog exploring legal issues related to the small business community, entrepreneurs, contractors, the construction industry, along with occasional pieces about futurism, the commercial space industry and space law, and other emergent technologies and novel legal fields. "Always read The Fine Print!"

When to Hire a Debt Collection Attorney

timlefebvre

When to Hire a Debt Collection Attorney

When to Consider Hiring a Debt Collection Attorney

As any small business owner is aware, getting paid for goods provided or services rendered is essential to keeping your business running. But all too often, people and businesses fail to meet their obligations. So what does a small business owner do when those clients fail to pay what is owed?

Generally, businesses take actions on their own behalf to get paid. This can often be effective, but not always. Additionally, The Fair Debt Collection Practices Act of 1978 sets some rules and regulations about the methods available for collecting outstanding accounts receivable. In order to avoid running afoul of these rules, it may be in the business owner’s best interest to consult a debt collection attorney to help in collecting outstanding sums.

A debt collection attorney may be your solution if you have exhausted your usual collections options, such as letters, phone calls, and payment restructuring plans with your clients. If you need a more effective type of correspondence to encourage repayment, a demand letter with a debt collection attorney’s letterhead is a very effective way to bring a client back to the table. People pay attention when they receive a demand letter in ways your own internal A/R department could only dream of! Obviously consulting a debt collection attorney and/or utilizing their services may be expensive, so the small business owner should consider the cost of the attorney against the cost of giving up on the collections effort. It is probably not worth using a debt collection attorney for a small sum, whereas it may be critical to the survival of your business to collect on larger outstanding sums.

You will certainly want to hire a debt collection attorney should you wish to take your debtor to court over the failed repayment. This is where debt collection attorneys are most valuable and goes beyond the scope of debt collection agencies that do not employ attorneys. Additionally, debt collection attorneys are instrumental in negotiating meaningful payment plans which often result in recovering the outstanding sum as well as interest.

Some elect to hire debt collection agencies, and in some cases that may be the right call. But it is worth noting that collections agencies do not have the same impact on many clients as a debt collections attorney does. Many debtors deal with collections agencies routinely, and are aware that ignoring a phone call or letter from such an agency may not have any adverse impact on them. But when any individual or business receives a letter from an attorney, the implication of a potential lawsuit often results in a quick response.

Contact LeFebvre Law, PLLC if you need any assistance in collecting on a debt you are owed.

 

Tim LeFebvre, Esq.