Often the reason that an account is referred to collections is that the debtor has stopped both making payments and communicating with the creditor.  Sending the account to collections can send a message that there will be consequences to the debtor’s failure to pay.  Moreover, sending the account to a collection law firm sends this message more strongly than other options as an attorney-driven approach is more effective in getting the attention of debtors due to the fact that the matter has been escalated to a law firm that has the  ability to initiate litigation quickly and expeditiously.  This case study is an example of the efficacy of a lawyer-based approach to collections.

The creditor in this case is a well-established factoring company.  The debtor is an excavation contractor.  The total amount owed was about $45,0000 of unpaid invoices.  The case was referred to our outside collection law firm after no payments were made for 4 months.  The creditor was frustrated as the debtor had become unresponsive to their attempts to collect payment.

After one phone call  and  a follow up email, the debtor responded that she wanted to pay what was due in full however she had a question about  one line item on the statement of account and asked us to provide the invoice for that line item.  She appeared very concerned about being sued.  The next day, before we even received the requested documents from the creditor, she wired payment for the total amount due.  She followed up about the invoice in question after the payment was made, which we provided.  The creditor was happy to have the matter resolved so quickly after their attempts to receive payment had been to no avail.

Collection Tip

The main take away of this case study is the power of a lawyer-based approach to collection.  It is the ability to impose real or perceived legal consequences that is the key to the success of collection law firms in motivating reluctant debtors to pay what they owe.

Who is TCLG?

The Collection Law Group ("TCLG") is a collection of attorneys who specialize in commercial debt collection on a contingency basis. TCLG is more effective than traditional collection agencies because they utilize an “attorney driven approach” to resolve past due accounts receivable. TCLG clients say their “attorney driven approach” yields faster and higher recovery amounts than other methods.

Why Use TCLG?

Below are the major reasons you should engage TCLG for your third party collection needs.

• TCLG is a group of lawyers who perform the collection work on a contingency basis at the same or lower rates than traditional agencies.
• TCLG takes a collection first approach. However, if necessary, TCLG will sue on your behalf on a contingency basis to collect past due amounts due you.    
• TCLG can be used without risk to see if they are as good as they say because they do all the work on a contingency basis (as opposed to an hourly fee arrangement) and do not require any long term agreements or contracts. 
• TCLG has a deep understanding of your business and the relationship between all parties involved in the transaction.

What is TCLG’s “Attorney Driven Approach"?

TCLG’s “attorney driven approach” is a two step process. First, it involves using attorneys to get the customers attention. TCLG clients have found that having an attorney make the collection call or send the collection letter yields better responses than other approaches. Second, once TCLG has the customer’s attention, they initiate a collection first mentality that focuses on resolving the dispute in an amicable fashion that preserves, as best as possible, the client/ customer relationship.

What is The Benefit of TCLG’s “Attorney Driven Approach"?

The major benefits to your organization of working with TCLG are:

• Increased recovery amounts.
• Decreased time periods to recovery outstanding amounts. 
• Increased file management efficiency.
• Increased time management efficiency.
• Improved communication.

TCLG has provided the above benefits to numerous clients in various industries for many years.
>> Learn more about The Collection Law Group 

This Case Study was taken from The Collection Intelligencer, The Collection Law Group's Monthly Newsletter, Issue 1015 - November 2022.