Dealing with unpaid invoices in US-Japan manufacturing trade can be a challenging process. In this article, we will explore a three-phase Recovery System designed to help companies recover funds from unpaid invoices. The system involves initial actions, involvement of attorneys, and recommendations for legal action. Let’s dive into the key takeaways from each phase:
Key Takeaways
- The Recovery System for Unpaid Invoices involves three phases: Initial Actions, Involvement of Attorneys, and Recommendations for Legal Action.
- Phase One includes sending letters to debtors, skip-tracing, and daily attempts to contact debtors for resolution.
- Phase Two involves forwarding the case to affiliated attorneys for legal intervention and further communication with debtors.
- Phase Three offers recommendations based on the possibility of recovery, including closure of the case or proceeding with litigation.
- Legal action in Phase Three may require upfront legal costs, but the rates for collection vary based on the age and amount of the accounts.
Recovery System for Unpaid Invoices
Phase One: Initial Actions
Upon identifying an unpaid invoice, swift action is crucial. Within the first 24 hours, a multi-channel communication strategy is deployed, reaching out to the debtor through letters, phone calls, emails, and other means. The goal is to establish contact and negotiate a resolution.
- The first of four letters is dispatched via US Mail.
- Comprehensive skip-tracing and investigation are conducted to gather optimal financial and contact data.
- Persistent daily attempts to communicate with the debtor are made for 30 to 60 days.
If these efforts do not yield a satisfactory outcome, the case escalates to Phase Two, involving legal counsel within the debtor’s jurisdiction. This transition is immediate, ensuring no momentum is lost in the recovery process.
Phase Two: Involvement of Attorneys
When a case escalates to Phase Two, the involvement of attorneys marks a critical shift in the recovery process. A local attorney within our network takes immediate action:
- Drafting a series of demand letters on law firm letterhead.
- Initiating contact with the debtor through calls, reinforcing the urgency of payment.
The attorney’s persistent efforts aim to resolve the matter before litigation becomes necessary.
If these intensified attempts fail to yield results, a detailed report is prepared, outlining the challenges encountered and suggesting potential next steps. This paves the way for Phase Three, where decisive recommendations are made based on the debtor’s asset investigation and the likelihood of successful recovery.
Phase Three: Recommendations and Legal Action
When the initial recovery efforts and attorney involvement fail to yield results, Phase Three offers a critical juncture. Here, the path diverges based on the feasibility of recovery. If the debtor’s assets and case facts suggest low recovery chances, case closure is advised—at no cost to you.
However, should litigation appear viable, a decision looms. Opting out incurs no fees, while proceeding requires covering legal costs—typically $600-$700. This investment enables our affiliated attorney to pursue all owed monies through legal action.
Should litigation not result in collection, rest assured, no further fees will be owed to our firm or the attorney.
Our fee structure is straightforward and competitive, reflecting the number of claims and their age. Here’s a quick breakdown:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed Claims |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Choosing the right course of action is paramount. Weigh the potential for recovery against the costs and risks of litigation carefully.
Frequently Asked Questions
What is the Recovery System for Unpaid Invoices?
The Recovery System consists of three phases: Phase One involves initial actions such as sending letters and contacting debtors, Phase Two involves the involvement of attorneys to demand payment, and Phase Three offers recommendations for legal action or closure of the case.
What happens if initial attempts to contact the debtor fail in Phase One?
If all attempts to resolve the account fail in Phase One, the case moves to Phase Two where it is immediately forwarded to one of the affiliated attorneys within the debtor’s jurisdiction.
What actions are taken by the attorney in Phase Two?
The attorney will draft letters demanding payment, attempt to contact the debtor, and provide recommendations for the next steps if attempts to resolve the account continue to fail.
What are the recommendations given in Phase Three?
In Phase Three, the recommendations can either be closure of the case if recovery is not likely or proceeding with litigation by paying upfront legal costs. The decision to proceed with legal action rests with the client.
What are the rates for the collection services provided?
The collection rates vary based on the number of claims submitted and the age of the accounts. Rates range from 27% to 50% of the amount collected, depending on the specific circumstances of the accounts.
What happens if the litigation to collect the debt fails?
If attempts to collect via litigation fail, the case will be closed, and the client will owe nothing to the firm or the affiliated attorney. The upfront legal costs paid will not be refunded.
