Securing overdue payments from Canadian retailers can be a challenging process, especially when it comes to recovering funds through legal action. Understanding the recovery process and the associated costs and rates is crucial for a successful outcome. In this article, we will explore the 3-phase recovery system, determine the possibility of recovery, and discuss options for legal action. Additionally, we will delve into the upfront legal costs, competitive collection rates, and factors affecting collection rates. By gaining insights into these key aspects, you’ll be better equipped to navigate the complexities of securing overdue payments from Canadian retailers.
Key Takeaways
- Understanding the 3-phase recovery system is essential for assessing the possibility of fund recovery.
- Determining the possibility of recovery involves a thorough investigation of the debtor’s assets and case facts.
- Options for legal action include litigation, with upfront legal costs ranging from $600.00 to $700.00 depending on the debtor’s jurisdiction.
- Competitive collection rates are tailored based on the number of claims submitted, with rates ranging from 27% to 50% of the amount collected.
- Factors affecting collection rates include the age of accounts, amount owed, and whether accounts are placed with an attorney.
Understanding the Recovery Process
Exploring the 3-phase Recovery System
When we tackle overdue payments, our approach is systematic and relentless. Phase One kicks off within 24 hours of account placement. We’re on it—sending letters, skip-tracing, and making daily contact attempts for up to 60 days. If there’s no resolution, we escalate to Phase Two, engaging our network of attorneys to exert legal pressure.
In Phase Two, our affiliated attorneys take the reins, drafting demand letters and making calls. It’s a concerted effort to secure your dues without courtroom drama. But if the debtor remains unresponsive, we’re prepared to advise on the next steps.
Phase Three is the decision point. We’ll give you a clear recommendation based on the debtor’s assets and case facts. If recovery seems unlikely, we suggest closure with no cost to you. If litigation is viable, you’ll weigh the upfront costs against the potential recovery. Recovery isn’t just a goal—it’s a commitment to your financial well-being.
Our rates are competitive and scaled to the volume of claims. Here’s a snapshot:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Remember, the goal is to secure what’s owed to you with efficiency and expertise. We’re in this together, every step of the way.
Determining the possibility of recovery
When we consider the recovery of overdue payments, the crux lies in assessing the feasibility. Not all debts are recoverable, and it’s crucial to recognize this early on. Our process involves a thorough investigation of the debtor’s assets and the surrounding facts of the case. Here’s what we consider:
- The age and size of the debt
- The debtor’s financial status
- Legal complexities surrounding the case
We strive to provide a clear recommendation based on these factors. If the likelihood of recovery is low, we may advise closing the case, sparing you unnecessary expenses.
In the event of a positive outlook, we’ll discuss the next steps, which could include litigation. Remember, this path involves upfront costs, but only if you decide to proceed. Our goal is to ensure you’re fully informed to make the best decision for your situation.
Options for legal action
When we hit a wall with standard collection efforts, it’s time to consider the legal route. Deciding to litigate is a significant step; it involves upfront costs and a clear understanding of the debtor’s ability to pay. If we deem the chances of recovery slim, we’ll advise against it, saving you unnecessary expenses.
Should you opt for litigation, here’s what to expect:
- Payment of upfront legal costs, typically $600-$700.
- Filing of a lawsuit by our affiliated attorney.
- Pursuit of all monies owed, including filing costs.
Failure to collect through litigation means the case closes, and you owe us nothing. It’s a no-win, no-fee scenario, ensuring your interests align with ours.
We’re committed to transparency in our rates and processes, ensuring you make informed decisions every step of the way.
Costs and Rates
Upfront legal costs
When we decide to take legal action, understanding the financial implications is crucial. Upfront legal costs are a reality we cannot ignore. These costs cover court fees, filing charges, and other related expenses. Typically, you’re looking at a range between $600 to $700, depending on the jurisdiction of the debtor.
Payment of these fees is a prerequisite for our affiliated attorneys to initiate a lawsuit on your behalf. It’s an investment towards recovering what’s owed to you, including the costs of filing the action itself. Should our litigation efforts not bear fruit, rest assured, you owe us nothing further.
Here’s a quick breakdown of potential upfront costs:
- Court costs
- Filing fees
- Attorney retainer fees
Remember, these upfront costs are your stepping stone to securing overdue payments. They are not additional fees but part of your strategic recovery plan.
Competitive collection rates
We’re in the business of maximizing your returns while minimizing costs. Our collection rates are tailored to be competitive, ensuring you get the best value for our services. The rates vary depending on the age of the account, the amount owed, and the number of claims you submit. Here’s a quick breakdown:
| Number of Claims | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Volume discounts kick in when you submit 10 or more claims within the first week—saving you even more. Remember, we only get paid when you do, aligning our interests with yours.
Our commitment is to provide you with efficient and effective recovery solutions. We strive to keep the costs transparent and within your budget, ensuring that the recovery process adds value to your business rather than becoming a financial burden.
Factors affecting collection rates
When we talk about collection rates, it’s not a one-size-fits-all scenario. Several factors influence the rates we can secure, and it’s crucial to understand these variables to set realistic expectations.
Firstly, the age of the account matters. The older the debt, the more challenging it can be to collect, often resulting in higher rates. Secondly, the amount of the debt plays a role. Smaller debts, especially those under $1,000, typically incur higher percentages due to the increased effort relative to the return.
Here’s a quick breakdown of our rates based on these factors:
| Claims | Age of Account | Amount | Rate |
|---|---|---|---|
| 1-9 | Under 1 year | Any | 30% |
| 1-9 | Over 1 year | Any | 40% |
| 1-9 | Any | <$1000 | 50% |
| 10+ | Under 1 year | Any | 27% |
| 10+ | Over 1 year | Any | 35% |
| 10+ | Any | <$1000 | 40% |
Additionally, the debtor’s jurisdiction can affect the costs involved, potentially altering the collection rate.
We strive to maintain competitive rates while ensuring the recovery process is efficient and effective for our clients.
Lastly, the number of claims you submit can impact the rate. Bulk submissions often come with a discounted rate, rewarding clients who engage our services for multiple accounts. It’s a balance of quantity and quality, where we aim to provide the best possible outcome for each unique case.
Frequently Asked Questions
What is the 3-phase Recovery System?
The 3-phase Recovery System is a process used to recover company funds from debtors. It involves sending letters to debtors, skip-tracing, contacting debtors through various means, and, if necessary, forwarding the case to affiliated attorneys for legal action.
What happens if the possibility of recovery is not likely?
If, after a thorough investigation, it is determined that the possibility of recovery is not likely, the case will be recommended for closure. In this scenario, there will be no obligation to pay the firm or affiliated attorney for the results.
What are the options for legal action?
If the recommendation is litigation, the client will have the option to proceed with legal action or withdraw the claim. If legal action is chosen, upfront legal costs such as court costs and filing fees will be required. If litigation fails, there will be no obligation to pay the firm or affiliated attorney.
What are the upfront legal costs for legal action?
The upfront legal costs for legal action typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction. These costs include court costs, filing fees, and any other necessary expenses related to filing a lawsuit.
What are the competitive collection rates?
The competitive collection rates depend on the number of claims submitted and the age and amount of the accounts. Rates range from 27% to 50% of the amount collected, with variations based on account age, amount, and attorney involvement.
What factors affect collection rates?
The collection rates are affected by the number of claims submitted, the age of the accounts, the amount of the accounts, and whether the accounts are placed with an attorney. These factors determine the percentage of the amount collected as the fee.
