It’s common for clients to ask their debt collection attorneys, “How long will it take to collect my money?”
As any legal advertisement will state, past results do not guarantee future performance. And this is especially true when it comes to debt collection. Determining how long it will take to collect a debt is not easy. There are many scenarios with different variables that can each affect how long it takes to collect.
For example, a demand for payment from an attorney may produce payment in full or a settlement. If demand fails, then we file for mediation, litigation, or arbitration. During those stages, the debtor may make a payment or a payment arrangement.
Other times, we sue or arbitrate, and the case is defended, which extends the shelf life of the claim. Or we will arbitrate or litigate the claim, get a judgment, and once the judgment is entered, execute on assets and collect. Even after the court enters the judgment, it can take a while to locate and seize the debtor’s assets.
And then there are times when, despite all efforts, collection is just not possible. So while we can cite statistics giving you the percentage of claims collected in the first 30, 60, and 90 days, that would not answer your question.
How Long Does It Take To Collect a Debt?
The time it takes to collect money owed depends on a few factors.
First, is the claim collectible? In order to collect, there must be assets to collect from. This is true regardless of the various stages of collection.
Is there a reason the customer isn’t paying the debt? Sometimes, customers withhold payment due to a dispute. We had a case where documentation of a dispute came to light in the demand phase. The creditor addressed the dispute and applied a partial credit towards the debt. After that, the customer agreed to pay the balance. Other times, the customer may choose not to resolve the debt and instead move to legal proceedings.
You may be one of many creditors chasing the same customer. There are some chronic non-payers whose inability to pay has nothing to do with finances. In that case, your former client or customer will make you go through the entire debt collection process to reduce the claim to judgment with enforcement proceedings.
You will need to wait to enforce the judgment if the marshal or sheriff has an execution from another judgment creditor or if a creditor has a security interest in some or all of the assets. It can take time.
Each stage of debt collection has an estimated time frame. If your underlying agreement with the non-paying customer includes steps you must follow to collect the claims, that will also influence the time frame.
Collection can take a while when cases are heavily disputed. How long it takes depends on any affirmative defenses asserted by the debtor, counterclaims filed, and their desire to come to a resolution.
If you have a claim and are wondering how long the collection process might take, contact us for a consultation. We have the experience that pays.