Managing non-payment issues in furniture export deals can be a challenging task, requiring a strategic approach to recover company funds effectively. This article explores a three-phase Recovery System designed to address non-payment issues in furniture export deals.
Key Takeaways
- Implement a three-phase Recovery System for managing non-payment issues in furniture export deals.
- Utilize skip-tracing and investigation techniques to obtain debtor information and initiate contact for resolution.
- Consider sending demand letters and engaging in communication with debtors through various channels like phone calls, emails, and faxes.
- Evaluate the possibility of recovery and make decisions on case closure or proceeding with litigation based on thorough investigation and debtor assets.
- Understand the cost structure for legal action, including upfront legal costs and collection rates based on the age and amount of the accounts.
Recovery System for Managing Non-Payment Issues
Phase One
Upon initiation, immediate action is taken to address non-payment. Within the first 24 hours, a multi-channel communication strategy is deployed, involving letters, phone calls, and digital outreach. The debtor is contacted daily for the first 30 to 60 days, leveraging skip-tracing to ensure accurate debtor information.
The goal is clear: establish contact and secure payment. If this phase does not yield results, the case escalates to Phase Two, involving legal representation.
The initial phase is critical, setting the tone for the recovery process:
- First of four letters sent via US Mail
- Comprehensive debtor information gathering
- Persistent contact attempts across various platforms
Should Phase One prove unsuccessful, the transition to Phase Two is seamless, with a focus on maintaining momentum in the recovery effort.
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. Immediate action is taken to draft and send a series of demand letters to the debtor. Concurrently, the attorney’s office initiates direct contact attempts through phone calls. Despite these intensified efforts, some cases remain unresolved. At this juncture, we provide a detailed report outlining the challenges encountered and our proposed recommendations for Phase Three.
The goal is to apply legal pressure and convey the seriousness of the situation to the debtor, prompting a swift resolution.
If Phase Two fails to yield payment, the following options are presented:
- Case closure recommendation if recovery is unlikely, with no fees owed.
- Litigation proposal, requiring a decision on proceeding with legal action and associated costs.
The decision to litigate involves upfront costs, typically ranging from $600 to $700, depending on jurisdiction. These costs cover court fees and filing expenses. Should litigation not result in payment, the case is closed with no further obligation.
Phase Three
At the crossroads of Phase Three, the path forward is clear-cut. Decisive action is paramount, whether it’s closing the case or initiating litigation. The choice hinges on a thorough assessment of the debtor’s assets and the feasibility of recovery.
Closure is recommended when prospects are dim, ensuring no further costs are incurred. Conversely, opting for litigation necessitates upfront legal fees, typically between $600 to $700. This step is a commitment to recover all dues through the legal system.
The decision to litigate is a calculated risk, balanced against the potential for full recovery.
Our fee structure is transparent and scales with the volume of claims. Here’s a snapshot of our rates:
- For 1-9 claims:
- Under 1 year: 30%
- Over 1 year: 40%
- Under $1000: 50%
- With attorney: 50%
- For 10+ claims:
- Under 1 year: 27%
- Over 1 year: 35%
- Under $1000: 40%
- With attorney: 50%
These rates are competitive, ensuring that our interests are aligned with your success in recovering what’s owed.
Frequently Asked Questions
What is the Recovery System for Managing Non-Payment Issues in Furniture Export Deals?
The Recovery System consists of three phases: Phase One involves sending letters to debtors, skip-tracing, and contacting debtors for resolution. Phase Two includes forwarding cases to affiliated attorneys for legal action. Phase Three provides recommendations for recovery, including closure of the case or proceeding with litigation.
What happens if recovery is not likely in Phase Three?
If recovery is not likely, the case may be closed, and there will be no fees owed to the firm or affiliated attorney. Alternatively, litigation may be recommended, and the client will have the option to proceed with legal action by paying upfront legal costs. If litigation fails, no fees will be owed.
What are the costs involved in legal action in Phase Three?
Clients may need to pay upfront legal costs such as court fees, filing fees, etc., which typically range from $600.00 to $700.00 depending on the debtor’s jurisdiction. The affiliated attorney will file a lawsuit on the client’s behalf for the amount owed.
What are the collection rates for DCI in Phase Three?
DCI offers competitive collection rates based on the number of claims submitted. Rates vary for accounts under 1 year in age, accounts over 1 year, accounts under $1000.00, and accounts placed with an attorney. For example, accounts under 1 year in age may have a rate of 30% of the amount collected.
What actions are taken in Phase One of the Recovery System?
Phase One involves sending letters to debtors, skip-tracing, investigating debtors’ financial and contact information, and contacting debtors via phone calls, emails, and other methods. If initial attempts fail, the case proceeds to Phase Two.
What is the process in Phase Two of the Recovery System?
In Phase Two, cases are forwarded to affiliated attorneys who send demand letters to debtors and attempt to contact them for payment. If efforts to resolve the account fail, the client receives a letter detailing the issues and recommendations for the next steps.
