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Collecting Unpaid Fees for Custom Design-Build Services

When it comes to collecting unpaid fees for custom design-build services, having a strategic recovery system in place is crucial. This article explores the Recovery System for Company Funds, Litigation Recommendation and Costs, and Collection Rates and Fees in detail to help companies navigate the process effectively and efficiently.

Key Takeaways

  • Having a structured Recovery System with multiple phases can increase the chances of successful fee recovery.
  • Consider the possibility of closure or litigation based on a thorough investigation of the case and debtor’s assets in Phase Three.
  • Be prepared to cover upfront legal costs if litigation is recommended for fee recovery.
  • Collection rates vary based on the number of claims submitted, with different rates for 1-9 claims and 10+ claims.
  • Utilize the services of a professional collection agency with competitive rates tailored to your specific needs.

Recovery System for Company Funds

Phase One

Within the first 24 hours of initiating Phase One, a multi-pronged approach is set in motion to secure your unpaid fees. Immediate action is taken to ensure that your case receives the attention it deserves.

Skip-tracing and thorough investigations are conducted to gather the most accurate financial and contact information on the debtors. Our team employs a variety of communication methods:

  • Sending the first of four letters via US Mail
  • Making daily attempts to contact the debtor through phone calls, emails, text messages, and faxes

Expect persistent efforts from our collectors, with daily attempts to reach a resolution within the first 30 to 60 days. If these attempts do not yield results, we seamlessly transition to Phase Two, involving our network of affiliated attorneys.

Phase Two

Upon escalation to Phase Two, the case is transferred to a local attorney within our network. This marks a critical shift in strategy, as the attorney’s involvement adds legal weight to the collection efforts. Here’s what to expect:

  • The attorney drafts and sends a series of demand letters to the debtor, leveraging the firm’s legal letterhead.
  • Concurrently, the attorney’s team initiates phone calls to the debtor, intensifying the pressure to settle the debt.

In this phase, persistence is key. The attorney’s dual approach of written and verbal communication is designed to push for a resolution.

If these intensified efforts do not yield results, we prepare to advise on the most appropriate course of action, which may include proceeding to Phase Three or recommending closure.

Phase Three

At the crossroads of Phase Three, a critical decision awaits. Should litigation be pursued or not? This juncture is pivotal, as it determines the course of action for recovering unpaid fees. If the investigation suggests a low likelihood of recovery, closure is advised, absolving you of any financial obligation to our firm or affiliated attorney.

In the event of choosing litigation, upfront legal costs will be incurred. These typically range from $600 to $700, based on the debtor’s jurisdiction.

Upon electing to litigate, the following fees apply:

  • Court costs
  • Filing fees
  • Additional legal expenses

Should litigation prove unsuccessful, rest assured, no further dues will be owed to our firm or the affiliated attorney. The commitment to a no-recovery, no-fee policy underscores our dedication to your financial interests.

Litigation Recommendation and Costs

Recommendation for Closure

When the odds of recovering unpaid fees are slim, closure is the prudent path. No further financial obligations burden your company when we advise to close the case. This recommendation comes after exhaustive analysis of the debtor’s assets and the surrounding facts of the case.

Closure is not the end, but a strategic decision to mitigate losses. You have the option to cease legal action and owe nothing, or continue with standard collection efforts:

  • Calls
  • Emails
  • Faxes

Deciding to close a case is a calculated move to preserve resources and avoid fruitless expenditures.

Should you choose to withdraw the claim, rest assured that our firm’s commitment to your financial well-being remains steadfast. We stand ready to assist with future claims, ensuring a robust defense of your financial interests.

Recommendation for Litigation

When the facts and debtor’s assets suggest a favorable outcome, litigation is the advised course of action. Deciding to litigate activates a series of steps:

  • Payment of upfront legal costs, typically $600-$700.
  • Filing of a lawsuit to recover all monies owed, including filing costs.

Should litigation prove unsuccessful, rest assured, you owe nothing further to our firm or affiliated attorney. It’s a no recovery, no fee commitment.

The decision to litigate is significant. It’s not just about potential recovery; it’s about sending a clear message to debtors that non-payment has consequences.

Remember, litigation is a tool to be used judiciously. Weigh the potential benefits against the costs and risks before proceeding.

Legal Costs

Understanding the financial implications of litigation is crucial. Legal costs can be a significant factor in the decision to pursue a lawsuit. These costs typically include court fees, filing fees, and may vary based on the debtor’s jurisdiction. Expect to budget between $600.00 to $700.00 for these initial expenses.

The decision to litigate should weigh the potential recovery against the upfront costs and the probability of successful collection.

Our fee structure is designed to align with your success in recovering unpaid fees:

  • For accounts under 1 year: 30% (1-9 claims) or 27% (10+ claims) of the amount collected.
  • For accounts over 1 year: 40% (1-9 claims) or 35% (10+ claims) of the amount collected.
  • For accounts under $1000.00: 50% of the amount collected, regardless of the number of claims.
  • Accounts placed with an attorney: 50% of the amount collected, reflecting the increased complexity.

These rates ensure that our interests are directly tied to the successful recovery of your funds. It’s a partnership where we only succeed when you do.

Collection Rates and Fees

Rates for 1-9 Claims

When submitting between one to nine claims, the fee structure is designed to be straightforward and competitive. The rates are contingent on the age and amount of the claim, ensuring that you receive a fair and proportionate service charge for the recovery of unpaid fees.

For claims less than a year old, the rate is 30% of the amount collected. As claims age beyond one year, the rate increases to 40%, reflecting the additional effort required for older debts. For smaller accounts under $1000, the rate is set at 50%, which is also the rate for accounts requiring attorney involvement.

The fee structure is tiered to align with the complexity and age of the debt, incentivizing early action and resolution.

Here’s a quick breakdown of the rates:

Age of Account Rate
Under 1 year 30%
Over 1 year 40%
Under $1000 50%

Remember, these rates apply to the initial batch of up to nine claims. Larger volumes of claims may benefit from reduced rates, as detailed in the subsequent section.

Rates for 10+ Claims

When handling a volume of 10 or more claims, economies of scale come into play, allowing for more favorable collection rates. Bulk submissions can significantly reduce costs, ensuring a greater return on your collection efforts. The structured fee schedule is as follows:

Age of Account Rate (% of amount collected)
Under 1 year 27%
Over 1 year 35%
Under $1000 40%
With attorney 50%

For large-scale debt recovery, this tiered approach incentivizes early action and reflects the complexity of older or smaller claims. It’s crucial to understand that accounts placed with an attorney remain at a 50% rate, due to the legal intricacies involved.

The goal is to maximize recovery while minimizing your expenses. This balanced strategy ensures that your company’s bottom line is protected, even when pursuing numerous debtors.

Frequently Asked Questions

What is the Recovery System for Company Funds?

The Recovery System for Company Funds consists of three phases: Phase One involves sending letters to debtors, skip-tracing, and attempting to contact debtors. Phase Two includes forwarding the case to an affiliated attorney for legal action. Phase Three offers recommendations for closure or litigation, with associated costs.

What happens if the possibility of recovery is not likely in Phase Three?

If recovery is not likely, the case may be recommended for closure, and there will be no fees owed to the firm or affiliated attorney. Alternatively, if litigation is recommended, the client can choose to proceed with legal action or withdraw the claim.

What are the legal costs involved in proceeding with litigation in Phase Three?

In litigation, clients are required to pay upfront legal costs such as court fees, filing fees, etc. These costs typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction. If litigation efforts fail, no fees are owed to the firm or affiliated attorney.

What are the collection rates for 1-9 claims?

For 1-9 claims, collection rates vary based on the age of the accounts and the amount collected. Rates range from 30% to 50% of the amount collected, with different percentages for accounts under 1 year, over 1 year, under $1000.00, and those placed with an attorney.

What are the collection rates for 10+ claims?

For 10+ claims, collection rates are lower than for 1-9 claims. Rates range from 27% to 50% of the amount collected, with similar variations based on the age of the accounts, amount collected, and attorney involvement.

What actions are taken in Phase One of the Recovery System for Company Funds?

Phase One involves sending letters to debtors, skip-tracing, investigating debtor assets, and attempting to contact debtors for resolution. If attempts fail, the case proceeds to Phase Two for legal action.


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