Managing non-payment issues in the USA-Brazil steel industry trade can be a challenging task. In this article, we will explore a recovery system for company funds and rates for debt collection services in this specific trade scenario.
Key Takeaways
- The recovery system for company funds involves a 3-phase approach: Phase One includes sending letters to debtors and skip-tracing, Phase Two involves forwarding cases to affiliated attorneys, and Phase Three offers recommendations for closure or litigation with associated costs.
- Rates for debt collection services vary based on the number of claims and age of accounts. For 1-9 claims, rates range from 30% to 50% of the amount collected, while for 10 or more claims, rates range from 27% to 50%. Accounts placed with an attorney have specific rate structures.
Recovery System for Company Funds
Phase One
Initiating the recovery process, immediate action is taken within 24 hours of account placement. The debtor receives the first of four letters, while our team conducts a thorough skip-trace to gather essential financial and contact information.
Daily attempts to engage the debtor through various communication channels are standard, aiming for a swift resolution. Should these efforts not yield results within the first 30 to 60 days, the case escalates to Phase Two.
The goal is clear: establish contact, communicate the urgency, and secure payment without delay.
Efficiency in Phase One is critical to the overall success of the recovery system, setting the tone for the subsequent phases.
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’s immediate action includes drafting a series of demand letters on their law firm letterhead, coupled with persistent telephone contact attempts. This phase is critical as it represents the transition from internal recovery efforts to legal enforcement.
- The attorney sends the first demand letter to the debtor.
- Telephone attempts are made to secure payment.
- If these efforts fail, a detailed report is prepared for the client.
The goal is to achieve resolution without further escalation, yet prepare for the possibility of moving to Phase Three, where litigation may become necessary.
Phase Three
Upon reaching Phase Three, the path forward becomes clear. If the debtor’s assets and case facts suggest low recovery prospects, we advise case closure, incurring no cost to you. Conversely, choosing litigation necessitates upfront legal fees, typically between $600 to $700, based on jurisdiction. These fees cover court costs and filing expenses, initiating a lawsuit to reclaim all owed funds, including litigation costs.
Litigation is a decisive step, and should efforts to collect fail, the case concludes without further financial obligation to our firm or affiliated attorney. It’s a calculated risk with clear financial boundaries.
The decision to litigate is pivotal, marking the final attempt to recover your funds through legal channels.
The following table outlines the anticipated legal costs:
| Jurisdiction | Upfront Legal Costs |
|---|---|
| Debtor’s Location | $600 – $700 |
Remember, the choice to proceed or withdraw is yours, with continued standard collection activities as an alternative to legal action.
Rates for Debt Collection Services
Rates for 1 through 9 Claims
When dealing with 1 through 9 claims, the rates for debt collection services are structured to align with the age and amount of the account. For accounts that are less than a year old, the fee is 30% of the amount collected. This rate escalates to 40% for accounts that have aged beyond a year, reflecting the increased difficulty in recovering older debts.
The fee structure is designed to be straightforward: the older or smaller the account, the higher the percentage taken by the collection agency.
For accounts that are particularly small, under $1000.00, the rate jumps to 50% of the amount collected. This higher rate compensates for the disproportionate effort required to collect on smaller debts. Similarly, accounts that necessitate legal action also incur a 50% fee, due to the additional legal complexities involved.
Here’s a quick breakdown of the rates:
| Account Age | Amount | Rate |
|---|---|---|
| < 1 year | Any | 30% |
| > 1 year | Any | 40% |
| Any age | < $1000 | 50% |
| With attorney | Any | 50% |
These rates ensure that the collection agency’s interests are aligned with your recovery success, while also reflecting the varying levels of difficulty associated with different types of claims.
Rates for 10 or More Claims
When dealing with a volume of 10 or more claims, economies of scale come into play, offering more attractive rates for debt collection services. Bulk submissions can significantly reduce costs, ensuring that your recovery efforts remain cost-effective.
| Age of Account | Rate of Collection |
|---|---|
| Under 1 year | 27% |
| Over 1 year | 35% |
| Under $1000 | 40% |
| With Attorney | 50% |
The structured approach to debt recovery in the steel industry trade between the USA and Brazil ensures that non-payment issues are managed efficiently, with a clear focus on preserving company funds.
It’s crucial to understand that while the rates are reduced, the commitment to recovering your funds remains unwavering. The sliding scale is designed to accommodate larger volumes without compromising on service quality.
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 contacting debtors for resolution. Phase Two includes forwarding the case to affiliated attorneys for legal action. Phase Three involves either closing the case if recovery is unlikely or proceeding with litigation with upfront legal costs.
What are the rates for debt collection services for 1 through 9 claims?
For 1 through 9 claims, the rates are as follows: Accounts under 1 year in age – 30% of the amount collected, Accounts over 1 year in age – 40% of the amount collected, Accounts under $1000.00 – 50% of the amount collected, Accounts placed with an attorney – 50% of the amount collected.
What are the rates for debt collection services for 10 or more claims?
For 10 or more claims, the rates are as follows: Accounts under 1 year in age – 27% of the amount collected, Accounts over 1 year in age – 35% of the amount collected, Accounts under $1000.00 – 40% of the amount collected, Accounts placed with an attorney – 50% of the amount collected.
What happens if recovery is unlikely in Phase Three of the Recovery System?
If recovery is unlikely in Phase Three, the case may be recommended for closure, and no fees will be owed to the firm or affiliated attorney. Alternatively, if litigation is recommended, the client can choose to proceed with legal action by paying upfront legal costs. If litigation fails, no fees will be owed.
What actions are taken in Phase One of the Recovery System?
In Phase One, letters are sent to debtors, skip-tracing and investigation are conducted to obtain debtor information, and attempts are made to contact debtors for resolution using various communication methods.
What occurs in Phase Two of the Recovery System?
In Phase Two, the case is forwarded to affiliated attorneys who send demand letters to debtors, attempt to contact debtors, and if necessary, provide legal representation to resolve the debt.
