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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