In business, there’s always the looming worry of doing great work for a client who never pays. Though frustrating, this scenario doesn’t leave you entirely without recourse ― you can always take legal action to try to recover the money you are owed. In this case, you’ll need a debt collection attorney on your side. Before proceeding down this road, it’s crucial to understand more about debt collection lawyers, what you should know when hiring one and how they differ from collection agencies.Editor’s note: Looking for the right collection agency for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
A debt collection attorney is a lawyer who works with you to develop legal strategies for recovering debts from nonpaying clients. Their work often involves completing and filing paperwork for you. If your case goes to trial, they typically represent you in court.
On the flip side, some debt collection attorneys represent debtors. In these instances, they work to protect those who are being sued.
You might need to hire a debt collection attorney in the following situations:
Try implementing sound debt collection strategies before hiring attorneys or agencies to help. For example, ensure your invoices are clear and present easy payment options.
Consider the following crucial factor when you’re looking for the right debt collection attorney:
Ensure your debt collection attorney adheres to the Fair Debt Collection Practices Act (FDCPA) and is well-versed in all debt collection laws.
When you’re owed money, you may weigh the pros and cons of hiring a collection agency vs. hiring a debt collection attorney. While both resources can help you recover debts, one option may be better than the other in specific circumstances.
Consider the following factors when choosing between an attorney and an agency:
In some circumstances, walking away from a long-overdue debt may be the best option. Acquiring new clients can be a faster, more reliable and less frustrating cash flow strategy.
You don’t have to hire an attorney or collection agency immediately after a client misses a payment or two. Here are a few intermediate steps to take before the situation escalates:
Your debt collection attorney can also help you collect on a judgment you’ve won and determine the best way to recover your money.
If you’re a business owner dealing with nonpaying clients, understanding your options is essential. Hiring a debt collection attorney can be a helpful choice if a nonpayment situation has escalated and you’ve given up on the client’s likelihood of paying you voluntarily. Legal advice can be invaluable in situations where you want to do the right thing and are unsure how to proceed.
Gem Siocon contributed to this article.