Your collection manager gave it their best shot — calls, letters, emails, faxes, an offer to go to debtor’s premises to pick up a check — before referring your non-paying customer out for collection. If the debtor doesn’t respond, or the responsive is not productive, your best option is to send the claim to a collection attorney.
A collection attorney’s job is to make that phone ring and bring the debtor to the table. There’s a good chance, after receiving calls and letters from an attorney, your once silent customer will reach out to you.
Then what? Do you call the customer back?
Opinions differ. Some creditors will cease communication with a customer once the account has been referred to a collections attorney. Other creditors will take the call. Regardless of which option you pick, frequent communication with collection counsel is of utmost importance — especially when the debtor makes contact. It is important to remain knowledgeable as the case progresses. Knowing where in the collection process the case is will further help you understand any communication the debtor may make.
If you choose to accept the debtor’s call, you may ask for payment in full as well as attorneys fees (in part or in whole), and court costs.
Some calls between creditor and debtor (and/or debtor’s agent) lead to meaningful conversations and sometimes an opportunity to do paying work. Such was the case for one of our clients in the environmental testing business: The client was owed monies by a building owner for work done in a New York Co-op. After suit was initiated, the debtor’s managing agent contacted the client directly, rather than us. The Client and the agent thoroughly analyzed the client’s work and found they provided a more thorough and quality service than the agent’s current vendor. Not only did the client obtain payment in full for the balance demanded in the lawsuit, they also gained several new assignments.
Of course, not all calls go this way. There are calls that are hostile and unproductive, during which the customer strongly states their refusal to pay and may even threaten a countersuit.
If you choose not make contact with a customer after referring their account to a debt collection attorney, any communication — or attempts at communication — should be referred to your debt collection attorney. The customer may be persistent in trying to “work things out” or circumvent speaking to your attorney; however, they will eventually get tired of calling and will either seek counsel or contact your collection attorney or call your counsel directly.
Regardless of your policy, contact is good. You want that phone, email, or fax message from your customer.