Collection Agencies vs. Collection Attorneys

If internal efforts have failed to resolve a debt issue, it may be time to call in a professional. But what type of professional should you choose a collection attorney or a collection agency?

Many companies will start with the latter in the hopes that legal action can be avoided. For the most part some collection agencies will take many of the same actions against the debtor that you may have already taken. They often start with a series of letters and then move to phone contact if the initial letters are not effective. However, Transworld Commercial takes and investigative approach combining the third party power collection agencies exhibit with specialized phone systems, software, and training which makes Transworld Commercial more efficient and cost-effective at collecting delinquent accounts.

Third party Collection Agencies are often chosen over collection attorneys because there are no up front costs and they do NOT have the negative image that is typically associated with using legal action.

This being said, the costs for collection services can vary greatly depending on the volume of accounts being submitted, the average size of an account, and the existing age of the accounts. Most collection agencies work on a percentage basis where they earn fees only on what they collect.

Costs involved can often make this prohibitive. Most collection attorneys charge an hourly fee, collect at least one-third of the amount recovered, or both. They usually charge a minimum fee or retainer and may require a minimum amount of debt. Plus, payment to the attorney is typically in addition to any court-related fees and charges connected with a lawsuit, if you decide to pursue a judgment in court.

As such, most companies refer debt to a collection agency first. Of course, the goal of most companies is to avoid these issues altogether and if one is dealing with smaller balances, a collection attorney is not a viable option.

Transworld Systems Commercial Division offers a sophisticated collections program that complies with FDCPA guidelines and has been thoroughly tested to achieve optimal results. In conjunction with our experienced representatives, Transworld Commercial can assist you in optimizing your third party effort while maximizing your own in-house procedures in the hopes of reducing your total bad debt exposure.

Over the past 5 years, Transworld Systems Commercial Division has collected over $500 million for our clients. Let us show you how we can recover the money owed to you using our sophisticated Online Commercial Portal. For more information about Transworld Systems, please contact us here.

_{The information contained herein is only intended to be consultative. Please consult with a collection agency or collection attorney for further information and advice.}