Hello,
What do you mean by "stuck in collections"? Have you just hired a collection agency or have you sold the right to collect to the agency?
Thanks.
Matt
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We are a fitness center, so we have automatic billing. The company that does our billing has a collections agency that after three months of deliquent payments the member goes into. I don't believe we've sold it, however we've had members in collections since our opening in 2007 and have received next to nothing from the agency. A friend of ours who is a small business owner said the only way he ever received any money was from taking each member to court. I didn't know if it was out of our hands to do this since they are in collections, or if we could pull them and then take matters into our own hands? We really just need to find a better way to receive some of this back because the agency isn't collecting for us. Thanks!
Ok, If you haven't sold the right to collect the debt to another agency in return for some sort of percentage payment, you have the right to simply cease collection efforts and file suit. Filing suit is the ultimate collection action. I would suggest contacting the collection agency and requesting that they return the files on those parties you are going to sue. Then find an attorney who will draft you a demand letter giving them some time period to pay, maybe 20 days. If you have a lot of accounts, make sure you negotiate a reduced amount for the letter. For example, if an attorney drafts a demand letter for one account, he may charge $100-150 for his time in doing it. If he is drafting 10 or 20, then it is simply changing the name, address and amount each time, so each additional letter takes only a minute or two to produce. If he is doing 10, I would say $100 for the first one and then $20 for each additional one.
If the customer ignores it, then you can file suit in small claims court for each case. You can recover your costs for the actions and include them in any demand. I would again suggest that you get help filling out the first complaint (which I believe are standard forms) and then using it as a template for all the rest. Make sure you get them all set to be heard on the same day if possible so that you can cut down on your time. Most will not show up and you will receive a default judgment. Some will show, and you will still receive a judgment.
Once you get judgments, you can file liens against real estate, seize bank accounts, and garnish wages up to 25% to collect your judgment.
Attorney
9 years experience in real estate, estate planning, and criminal law