Why Hire A Lawyer Instead Of A Debt Collection Agency?
In some instances a collection agency is the right choice. They are great for collecting small consumer debts and small business debts.
When the debt is over $2,000.00 it is not the best option. Why? Most business owners do no relish receiving a letter from a law firm. None look forward to having the sheriff show up at the office and serve them with a lawsuit.
Letters and phone calls from a collection agency, while annoying, can be easily ignored. Do you usually ignore letters from lawyers?
Also a successful lawsuit gives you something that a collection agency cannot provide your company. A judgment.
What Is A Judgment?
A judgment is a piece of paper issued by the court and signed by the Judge stating that you the creditor has won the lawsuit and is entitled to a certain amount of money.
Once you have a judgment for a certain amount of money, the creditor can employ numerous ways to collect the money. Such things as garnishing bank accounts, seizing property and goods, garnishing wages.
These methods are unavailable without a judgment.
They also don’t work if you are too late and other creditors have taken them or there are no assets available anymore.
Collecting on your business accounts receivable is a race against time. Some studies show that the likelihood of collecting the full value of an account decreases by 12% each month.
Once an account becomes 90 days old, debtors will not pay voluntarily and you must make a significant effort to convert the account into cash. More letters from a collection agency are not likely to yield the results you want.