I was recently contacted by a big law firm that had taken a $1,000,000 arbitration award against a debtor company in the construction trades. Sounds wonderful, right?
Here’s the problem. A simple search showed that the debtor had zero assets. I have no doubt that this creditor spent tens of thousands of dollars to get an arbitration award (and paid the arbitrator).
Research the debtor BEFORE you spend money on the case
Practice Due Diligence Prior to Entering Contracts
Businesses often have very little recourse against a debtor customer when the debtor customer becomes insolvent, files for bankruptcy or becomes inactive. A debtor in these cases usually has no assets to pay the debt or satisfy a judgment. Many times, these situations can be avoided with some due diligence before entering into a business relationship with the customer.
Some due diligence strategies include a credit check, a judgment and lien search in a county index, asset search, UCC search and requests for financials including tax returns, profit and loss statements and other asset and liability information. It is also useful to obtain information and references from other vendors, suppliers and customers of the business to gain valuable insight into the company’s integrity and respect for payment on invoices. All of this is easy to accumulate and tells a story about the financial viability of the company. The information will help the business creditor make sound decisions when entering into a business relationship with a potential customer to lessen the risk of unpaid invoices.
Do You Really Need a Middleman for Your Debt Collection?
More and more credit managers are recognizing that they no longer needing to place their Missouri debt collection cases with collection agencies.
Our debt collection law firm offers the same services as a collection agency. However, while the collection agency cannot take your case to trial, our Missouri debt collection lawyers can, if necessary.
If you start off with a collection agency and that agency is unsuccessful and suggests filing a lawsuit, then that collection agency will eventually outsource the debt to an attorney. The end result usually is that your costs go up because now the collection agency has to increase the percentage of the debt they keep so they can compensate the law firm. Note that they still continue to take their fee. For failing.
So effectively, by going this traditional route, you have basically hired a middleman with their associated overhead who really hasn’t brought anything useful to the table.
Is your collection lawyer outsourcing your company’s Springfield Missouri debt collection case?
Did you know there are some collection agencies that Springfield debt collection lawyers will not take cases from?
Contact Missouri Collections Group
Give Jason Krebs a call or send us an email to set up an appointment today to meet with a Missouri collection attorney about our legal services including commercial debt collection, property management evictions, medical debt collection, our flat fee demand letter service or schedule your free receivables review in our Springfield, Missouri office near Battlefield and 65 on Ingram Mill, south of Glendale High School.
Missouri Collections Group
2838 S Ingram Mill Rd
Springfield, Missouri 65804
email – contact@MissouriCollectionsGroup.com