A typical collection law
firm will specialize in both commercial collections and consumer
collections. A law firm is different from a collection agency
in the service and approach used. A collection agency will
tend to be more research and service oriented, and will usually be
more patient with a Debtor's reasons for non-payment. That does not
mean that results are better or worse than that of a collection law
firm.
A Debtor may feel more
immediate pressure from a law firm, since the law firm is usually
located in the same area as your debtor. The fear of a lawsuit is
greater when threatened by a law firm than it is when threatened by
a collection agency. The law firm can file a lawsuit immediately,
unlike the collection agency which has to first forward the claim to
a law firm.
A collection law firm will
usually require accurate information when an account is placed for
collection (they usually do less research themselves), and will tend
to be less of a
hand-holder to a creditor than the staff of a
typical collection agency. When it comes to your debtor's
reasons for non-payment, the collection law firm will typically make
the option of a lawsuit available to you more timely than a
collection agency will. In fact, regardless of the Debtor's
reason for non-payment, the collection law firm will almost always
present you with the option of a lawsuit. Some exceptions exist.
Many collection law firms
match collection agencies in their research abilities, but most
collection law firms do not concentrate on in-depth skip tracing and
debtor research. Collection agencies tend to invest more time
into verifying and gathering accurate information about cases they
are handling.
Collection agencies will
handle small balance accounts more readily than a collection law
firm.
Does a
collection law firm have better results than a collection agency?
The answer depends solely on the Creditor's customer
base. If the Creditor sells to credit-verified and credit-worthy customers, both the collection agency and
the collection law firm will have similar results with the exception
of the Debtor who is
truly in a financial crisis. In that instance, the collection
law firm may be the better approach. Whichever Creditor applies the
most legal pressure, will likely get paid first.
