When Should You Turn Over An Account to a Collections Attorney?

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Determining when to turn over an account to a collections attorney is a dilemma every credit manager encounters. On the one hand, all businesses live and die on sales. On the other, selling products and services without getting paid is a recipe for disaster.

With over thirty years of commercial debt collection experience, our general thought is that an initial reminder should go out ten days after terms, a second reminder at terms plus thirty and a final reminder at terms plus sixty. If your client has not responded to you after the third reminder, your client is now officially your debtor. It is one thing if the customer communicates with you the reason for non-payment. It is quite a different story if they have gone silent.

When a customer not only fails to abide by your terms but is also failing to communicate with you, odds are you are not their only unpaid creditor and you should take immediate action.

If your customer has made contact and promised to make payment and has reneged, without explanation It is a though they never communicated with you. Two or more unfulfilled promises in our view constitute a deadbeat shuffle. In this situation delaying immediate legal collection affords your debtor control of your money.

Another sign that it is time to bring in a collections attorney is when the debtor offers to make minimal payments over time, but refuses to offer you security. Unless you have secured the debt with a Uniform Commercial Code Security Interest, a mortgage, a mechanics lien or a joint pay agreement, accepting minimum payments without security allows more aggressive creditors to gain the upper hand.

Obviously, balancing the business relationship with the need to get paid is a customer-by -customer analysis. No single formula works for all.

When you determine that a collections attorney is needed, we are available to work with you to aggressively collect your debts. We give you the choice of selecting how we get paid!!

You can choose:

  • A contingency fee agreement in which we do not get paid unless we collect from the debtor; or
  • An hourly fee.

For a no obligation consultation, contact Alan M. Cohen at (508)620-6900 or email alanmcohen@collections-law.com

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