When staffing clients go bankrupt, it can have a significant impact on a company’s funds and operations. In such situations, it is crucial to have a recovery system in place to navigate the complexities of debt collection and legal proceedings. This article outlines a three-phase Recovery System for Company Funds to help companies recover funds from bankrupt clients effectively and efficiently.
Key Takeaways
- Implement a three-phase Recovery System for Company Funds to recover funds from bankrupt clients.
- Phase One involves sending letters to debtors, skip-tracing, and attempting to contact debtors for resolution.
- Phase Two includes forwarding cases to affiliated attorneys for legal action and debt recovery.
- Phase Three offers recommendations for closure or litigation, with associated costs and rates for legal proceedings.
- Consider the possibility of recovery and make informed decisions on pursuing legal action based on the circumstances.
Recovery System for Company Funds
Phase One
Upon initiating Phase One, swift action is taken to secure a resolution. Within 24 hours of account placement, a multi-channel approach is deployed:
- A series of four letters is dispatched via US Mail to the debtor.
- Comprehensive skip-tracing and investigation are conducted to unearth optimal financial and contact data.
- Persistent contact efforts commence, utilizing phone, email, text, and fax.
Daily attempts are made to engage with debtors, spanning a critical period of 30 to 60 days. Failure to resolve the matter triggers a seamless transition to Phase Two, involving immediate case forwarding to our network of specialized attorneys.
Phase Two
After the initial outreach fails, the case escalates to our network of affiliated attorneys. Immediate action is taken to draft and send a series of demand letters to the debtor, now with the added weight of legal letterhead. Concurrently, persistent phone calls aim to secure a resolution.
If these intensified efforts do not yield results, a critical decision point is reached. We provide a detailed report outlining the challenges and our recommended course of action.
The choice is yours: withdraw the claim at no cost, or prepare for litigation. Should you opt for legal proceedings, be aware of the upfront costs involved:
- Court costs
- Filing fees
These typically range from $600 to $700, depending on jurisdiction. Below is a summary of our competitive collection rates:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Remember, if litigation does not result in recovery, you owe nothing further. The path forward is in your hands.
Phase Three
Upon reaching Phase Three, the path forward becomes clear. You’re presented with two distinct options based on our comprehensive analysis of the debtor’s assets and the surrounding facts of the case.
- Option 1: If recovery appears unlikely, we advise case closure. In this scenario, you owe nothing to our firm or our affiliated attorney.
- Option 2: Should litigation seem viable, a decision point arrives. Opting out means withdrawing the claim at no cost. Alternatively, standard collection activities can continue. Choosing litigation requires covering upfront legal costs, typically between $600 to $700.
Should litigation proceed and fail, the case concludes without further financial obligation to our firm or affiliated attorney.
Our fee structure is competitive and varies based on claim volume and age. Here’s a quick breakdown:
| Claims | Under 1 Year | Over 1 Year | Under $1000 | With Attorney |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
The decision to pursue litigation is significant, and we stand ready to support you with expertise and action, regardless of the chosen path.
Recovery System for Company Funds
What is Phase One of the Recovery System for Company Funds?
Phase One involves sending letters to the debtor, skip-tracing, investigating, contacting the debtor, and attempting to resolve the matter within the first 30 to 60 days.
What happens if all attempts to resolve the account fail in Phase One?
If all attempts fail in Phase One, the case is forwarded to one of the affiliated attorneys within the debtor’s jurisdiction in Phase Two.
What is Phase Two of the Recovery System for Company Funds?
Phase Two involves the attorney drafting letters demanding payment, contacting the debtor, and providing recommendations for the next steps if all attempts fail.
What are the options in Phase Three if recovery is not likely?
In Phase Three, if recovery is not likely, the case may be recommended for closure with no obligation for payment. If litigation is recommended, the client can decide whether to proceed with legal action.
What are the upfront legal costs if litigation is recommended in Phase Three?
If litigation is recommended, the client will be required to pay upfront legal costs such as court fees, filing fees, etc., which typically range from $600.00 to $700.00.
What are the collection rates for DCI based on the number of claims submitted?
DCI provides competitive collection rates based on the number of claims submitted, with rates ranging from 27% to 50% depending on the age and amount of the accounts.
