Business

Debt collection agency vs debt collection attorney: Know the differences

Businesses in New York often spend considerable resources and time to get money back from their debtors. Unfortunately, more than 70% of all judgments go unrecovered. What if you have tried everything but failed to recover the money? The obvious answer is to seek professional help. You need to consult a New York collection lawyer to understand the legal options you can consider. Contrary to what some people believe, debt collection agencies and debt collection attorneys are not the same. Here is a look at the differences. 

Your collection lawyer can sue

Collection lawyers know everything about law and take legal measures to get your money back. Although not always necessary, a lawyer can actually take your debtor to court if they don’t repay the debt. Your debtor may feel the pressure and pay the money through negotiation when an attorney is involved. No one wants to go to court, and when you hire an attorney, you make it evident that you are not willing to let go. On the contrary, debt collection agencies can only chase a debtor to an extent, but they cannot threaten to take legal action. 

Your collection lawyer could cost you less

Usually, agencies charge a part of the debt recovery as their fee. Depending on the complications involved and the work required to recover the money, an agency can charge as high as 40% of the final amount. Agencies take considerable risks, and that is the crux of their fee. In contrast, collection lawyers either work at an hourly rate or take a contingency fee. If the lawyer asks for a part of the recovery, it would typically be lower than an agency. Some law firms in NY also charge a flat fee for select cases.

Your collection lawyer only takes limited cases

Unlike agencies that would agree to recover any type or amount of debt as long as they get paid, collection lawyers usually take high-worth cases. At the end of the day, hiring an attorney will only make sense if you have a lot at stake. Many law firms also specialize in handling investigations and often pursue debtors relentlessly, which is a big advantage for clients. 

Now that you know the basics, go ahead and hire a reliable collection lawyer for your business. You wouldn’t have to waste your valuable time chasing debtors and enforcing judgments anymore, and your attorney will also take care of the paperwork.

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