At The Collection Law Group we often have clients who want us to help them collect on their behalf but they do not have agreements in place that help to enhance the collection process.
Below are some things to think about to make sure the collection process goes as smoothly as possible when an outside collection firm needs to be engaged.
- Is there an agreement in place that covers what happens when payments are not received timely?
- If no formal agreement is in place has the debtor signed a credit application which obligates them to pay in a timely fashion and be responsible for interest and costs to collect?
- Is there an arbitration provision that controls in the event litigation is necessary? At TCLG we generally believe these provisions are not in the best interest of our clients due to the cost associated with arbitration.
- If there is an agreement in place does it provide for the proper jurisdiction to sue? From a collection standpoint we believe it is generally best to sue in the jurisdiction where the debtor’s assets are located. However language that allows for jurisdiction where the creditor and/or debtor are located is usually best.
The above are just some of the items every creditor should make sure are in place to ensure collections go smoothly in the event a third party collection firm is necessary.
Collection Tip: Make sure an agreement and/or signed credit application is in place with all debtors that provides advantageous provisions for the creditor in the event collection action is necessary.