Managing non-payment issues in furniture exports to Belgium can be a challenging task for companies. In this article, we will discuss a Recovery System for Company Funds and Litigation Recommendations to address such issues effectively and efficiently.
Key Takeaways
- Implement a 3 phase Recovery System for efficient fund recovery process.
- Consider closure of the case if recovery is unlikely after thorough investigation.
- Evaluate the option of proceeding with legal action carefully, considering upfront legal costs.
- Understand the rates for collection services based on the number of claims and age of accounts.
- Collaborate with affiliated attorneys for effective debt recovery strategies.
Recovery System for Company Funds
Phase One
Upon initiating the recovery system for company funds, swift action is taken within the first 24 hours. The debtor receives the initial correspondence, and a comprehensive investigation is launched to gather essential financial and contact information. Our team employs a multi-channel approach, including phone calls, emails, and texts, to engage with the debtor and seek resolution.
- The first of four letters is dispatched via US Mail.
- Skip-tracing and investigative measures are undertaken.
- Daily attempts to contact the debtor are made for 30 to 60 days.
Should these efforts not yield the desired outcome, the process seamlessly transitions to Phase Two, where the case is escalated to our network of affiliated attorneys.
The goal is to resolve the matter expediently, minimizing the need for further legal action and associated costs.
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network, initiating a more assertive approach. The attorney will draft and send a series of demand letters to the debtor, leveraging the weight of legal letterhead to prompt payment. Concurrently, the attorney’s team will engage in persistent attempts to contact the debtor through various communication channels.
- First demand letter sent immediately upon case transfer
- Continuous telephone outreach by attorney’s staff
- Additional demand letters follow, increasing pressure
If these intensified efforts do not yield a resolution, a critical decision point is reached. We will provide a detailed report outlining the challenges encountered, including an overview of US-Belgium trade tensions and the specific impact of Belgian payment delays on your business. This report will guide you to the most prudent course of action, whether it be proceeding to litigation or considering alternative measures.
The decision to escalate matters is not taken lightly, and we ensure that every possible avenue for amicable resolution has been exhausted before moving forward.
Phase Three
Upon reaching Phase Three, the path forward becomes clear. If the investigation into the debtor’s assets and the case facts suggests a low likelihood of fund recovery, we advise to terminate the case. This decision incurs no fees from our firm or affiliated attorneys.
In contrast, choosing litigation necessitates a financial commitment. Legal action requires upfront costs, typically between $600 to $700. These cover court and filing fees, and our affiliated attorney will initiate a lawsuit for the full amount owed, including legal expenses. Should litigation prove unsuccessful, the case concludes without further charges.
Our fee structure is straightforward:
- For 1-9 claims, rates vary from 30% to 50% of the collected amount, depending on the age of the account and the claim amount.
- For 10 or more claims, the rates range from 27% to 50%.
The decision to pursue litigation or close the case rests solely with you, ensuring control over the recovery system for your company’s funds.
Litigation Recommendations
Closure of the Case
When the pursuit of overdue payments reaches a standstill, the decision to close the case may be the most prudent course of action. Closure is recommended when the likelihood of fund recovery is deemed low after a comprehensive review of the debtor’s assets and the surrounding facts. This step ensures that you, as the exporter, are not incurring additional costs without the prospect of a favorable outcome.
In the event of case closure, no fees are owed to the firm or the affiliated attorney. This provides a risk-free resolution for exporters who have reached the end of the recovery process. Should you choose to discontinue legal action, the option to withdraw the claim is available, releasing you from any financial obligations to the firm.
The decision to close a case is a critical juncture, requiring careful consideration of the potential for recovery versus the costs involved.
For those who decide against litigation, continued standard collection activities—such as calls, emails, and faxes—remain an alternative. These efforts can persist without the need for legal escalation, maintaining pressure on the debtor while avoiding the expenses associated with court proceedings.
Proceeding with Legal Action
When all other avenues have been exhausted, legal action becomes the necessary step in debt recovery. The process involves a series of legal measures, such as obtaining a writ of execution, which allows for the seizure of assets, garnishing wages, or placing liens on property. These actions are designed to compel payment from the debtor and ensure that your company recovers the funds owed.
Costs associated with litigation can be a concern. You will be required to cover upfront legal expenses, which typically range from $600 to $700. This includes court costs and filing fees. Upon payment, our affiliated attorney will initiate a lawsuit to recover all monies owed, including the costs of filing the action.
It is crucial to weigh the potential recovery against the costs and likelihood of success. If litigation is deemed unfeasible, the case may be recommended for closure, with no further obligations to our firm.
The decision to litigate should be informed by a thorough assessment of the debtor’s assets and the facts of the case. If the probability of recovery is low, it may be more prudent to cease legal proceedings and consider alternative collection activities.
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 affiliated attorneys for legal action. Phase Three involves either recommending closure of the case if recovery is unlikely or proceeding with litigation.
What are the costs involved in legal action for non-payment issues?
The costs for legal action include upfront legal costs such as court costs and filing fees, ranging from $600.00 to $700.00. If litigation fails, there are no additional costs to the company.
What are the rates for collection services provided by DCI?
DCI provides competitive collection rates based on the number of claims submitted. Rates vary depending on the age and amount of the accounts, with percentages ranging from 27% to 50%.
What happens if I decide not to proceed with legal action after Phase Three?
If you decide not to proceed with legal action after Phase Three, you have the option to withdraw the claim and owe nothing to the firm or affiliated attorney. Alternatively, you can allow standard collection activities to continue.
What actions are taken during Phase One of the Recovery System?
Phase One involves sending letters to debtors, skip-tracing, investigating debtors’ financial information, and attempting to contact debtors through various means such as phone calls, emails, and faxes.
What is the process during Phase Two of the Recovery System?
Phase Two includes forwarding the case to affiliated attorneys who will draft letters demanding payment from debtors and attempt to contact debtors via phone calls. If no resolution is reached, the next steps are recommended to the company.
