The advantages of using an attorney to collect a business debt

On Behalf of | Feb 27, 2023 | Business Law |

In almost every industry, people default on their debts. It can be other companies, or it can be individual consumers. Whatever the reason for the default, it puts businesses in a delicate, unpleasant place. To recover a debt, companies often turn to collection agencies, but they do not have the advantages that an attorney skilled in creditor’s rights can provide.

What can an attorney do that a traditional collections agency cannot do?

There are two primary difficulties in recovering debt: recovering as much as possible and not endangering the debt through illegal tactics. By turning to a collection agency, you are selling them your debt at a steep discount: pennies on the dollar in many cases. These debt collectors then take on the burden of going after the debtor. Many companies consider delinquent debt unrecoverable and would rather take some form of compensation than pursue it.

Some companies do maintain an internal debt collection department, but those can fall into the other difficulty: invalidating the debt through illegal actions. Debtors have significant legal protections, and taking too aggressive a course of action can impact the money owed. This is where an attorney makes the largest impact. They understand the legal reality of pursuing a debt aggressively.

What tools does an attorney have that a collections agency may not?

Lawyers use the legal methods of debt collection, which can include negotiating a settlement – this is what the collections agency would do – but they can take additional steps, such as (if there has been filing of a lawsuit and judgement obtained):

  • Using a property lien to enforce a debt.
  • Seizing property
  • Pursing wage levying
  • Attaching property

The law allows creditors several tools to pursue debts. However, the proper application of such tactics can be legally difficult.

What is your ideal outcome?

In a perfect world, you wouldn’t need debt collection services. But when they become necessary, you must choose the method of debt collection that works best for you.


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