What is the value of "written off" receivables?

Updated: January 01, 2012

Debtors these days are in business themselves

just like you. They are making the same decisions you are.

When do I sue to recover revenue and for what balance

size is it worth suing? This "on the job training" prepares

them for the collection calls they receive. Most know

that if they hold out long enough, the collection agency

will go away. They are educated enough to know that due

to the balance size, they will never hear from an attorney.

A typical balance threshold for suit is $5,000.00

and above. However, due to the rising costs in litigation,

bankruptcies, and unsatisfied judgments, many companies

are increasing the threshold to $10,000.00 and


This policy creates a "sweet spot." The "sweet

spot" is balances that range from $1,000.00 to $9,999.99

and represents accounts written off as too small to sue

and cases younger than 24 months from the due date.

So what can you do to address this?

The answer is this: Cases that have fallen into

the "sweet spot" may have value. The value is determined

by credit scoring and law office collections.

As written earlier, these debtors have never

heard from an attorney, so placing them with a law office

for collection calls will recover revenue thought lost. The

method we use to maximize your return on investment

in time and to ensure the revenue return is to score the

written off cases. Scoring will enable you to determine

those that have money to pay and are still in business.

After all, since they are still in business after a year or so,

it is obvious they could pay, but decided not to.

For years, I have been recommending this action

to clients and all have profited by this policy. Statistics

from our in-house law office collections show that "sweet

spot" recoveries range from 6% to 20% depending on the

nature of your portfolio.

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