As a business owner, one of the most unpleasant experiences you may face is collecting debts from past-due clients or customers. Debt collection is a tedious and time-consuming process and any mistake you make can trigger liability exposure. This makes it important to know how to avoid such situations. This is possible by working with one of the skilled New York collection attorneys. A great attorney will help make the collection process bearable and productive. The following are the mistakes you can avoid when you have an attorney on your side:
Before you start collecting on past-due accounts, you should know the difference between these two kinds of collections. Commercial collections are a process to collect outstanding debts a business owes to another business. Meanwhile, consumer collections concentrate on collecting debts from individuals incurred for personal purposes. The regulation of such collections differs greatly and a lawyer with knowledge of these differences can help you avoid facing legal issues.
Typically, collection agencies work on many clients, so they tend to do their collection efforts by sending out collection letters to debtors. These letters are usually mailed out in batches based on a set schedule. A few collection agencies follow their letters up with calls. However, they will usually stop aggressive collections activity for you when they think they cannot succeed.
Meanwhile, a collection lawyer can give you more individualized attention. Thus, they can provide you with a range of collection options including less aggressive communication approaches and filing a lawsuit. But, because you must pay for their effort, you should consider the size of the debt you want to recover. Although some types of debts let you recover attorney’s fees when you prevail at trial, it is often not wise to depend on this recovery since the majority of litigation disputes get settled without going to trial.
A great attorney will start each matter with an evaluation. They find the debtor and their assets, get information on real property they own, other debts they owe, their current financial status, and other liens or outstanding judgments against them. They will look at the full picture to determine the best course of action. They may pursuit litigation to get a judgment if your case does not get settled with the threat of litigation. This way, they can bring a positive outcome to your business without incurring the litigation cost.