When your debtor/customer repeatedly refuses to pay the bill owed, or ignores your letters and calls regarding the debt, we suggest contacting an Illinois collections law firm. Collection agencies call, harass and often break the law. A collection law firm on the other hand do legal work.
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The lawyers we recommend typically, but not always, take the same steps in every collection case. First they will send out a letter. Often times the law firm letterhead is enough to get the debtor to pay. Where this is the case, you avoid any legal recourse against the debtor, which undoubtedly saves you time, energy, and money. Sometimes an additional letter and/or phone call takes place. When this happens and the debtor still refused to pay, the lawyers we recommend usually will file a law suit. They don’t waste time, normally filing a lawsuit within one month of the date that you hire them if not sooner if you want.
Once the lawsuit is filed in court, and the debtor is notified of the lawsuit, he is required to respond. If he does not respond to the lawsuit, the creditor can request a default judgment, which in essence means he ‘wins’ his lawsuit. At this point, the collection process may actually begin despite the fact that the debtor is still not cooperating. The court may either garnish up to 25 percent of the debtor’s wages, or it may require the selling of the debtor’s assets such as car, real estate, or bank accounts (known as a lien) to satisfy his debts.
Filing a lawsuit in our opinion is the best course of action you can take when you are owed money and the debtor won’t pay because it forces them to respond. Otherwise they can continue to play games and ignore you. They may end up declaring bankruptcy or they may start paying, but either way it puts pressure on them and gives you an answer.
The way collections attorneys are paid varies. If you are owed several debts, you may be able to find a collections attorney who is willing to take the case on a volume basis. This means they will charge a fee for each debt collected or for the amount of time spent in collecting the debt. Other collections attorneys work on a contingency fee basis. A contingency fee is where the attorney pays all costs associated with the collections and recovers those fees, as well as a percentage of the total debt collected, in exchange for his legal services. They only get paid if they win.
For example, if a customer owes you $40,000, and your collections attorney charges a 25% contingency fee, your attorney will take $10,000 in addition to the costs incurred in filing the lawsuit, etc., and you get the rest. Contingency fees are very common in debt collection cases. Because of this, the larger the debt owed, the easier it should be to find an attorney to take your collections case. That said, if an attorney doesn’t think that there is a good chance of recovering anything they are less likely to agree to take a case on a contingency basis.
Some lawyers only take cases where they get paid by the hour. This requires a retainer fee which is an up front payment which is similar to a debit card. The bad news in these cases is that you pay the lawyer no matter the result and no matter the size of the debt. The good news is that if you have a large debt to collect, you will often net more this way than if you hire a lawyer on a contingency basis. In addition, in some cases the judge will order the debtor to pay your attorney’s fees.
We typically know lawyers that will work on an hourly or contingency basis depending on where the case is located and the strength of the claim along with what you as a client want. The following links discuss fees and working with an attorney in great detail.
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