How to Deal with Debtors Declaring Bankruptcy After a Judgment

Dealing with debtors who declare bankruptcy after a judgment can be a challenging situation for creditors. It is important to have a clear recommendation process and understanding of the legal actions involved in such cases. Additionally, knowing the collection rates for different scenarios can help in making informed decisions. Here are the key takeaways from the process:

Key Takeaways

• Thorough investigation is crucial before deciding on the next steps.
• Consider closure of the case if recovery seems unlikely.
• Understand the upfront legal costs involved in pursuing litigation.
• Know the collection rates based on the number of claims submitted.
• Make informed decisions based on the outcome of the litigation process.

Recommendation Process

Thorough Investigation

Before deciding on litigation, a thorough investigation is crucial. This initial phase involves a deep dive into the debtor’s assets and the facts of the case. If the investigation suggests recovery is unlikely, the recommendation is to close the case, incurring no cost to you. However, if the evidence points towards a possible recovery, litigation becomes an option.

Strategies for dealing with uncooperative debtors are multifaceted, including public records search and analyzing the debtor’s digital footprint. Persistence and collaboration with investigators can unearth critical information that may influence the decision to litigate.

The decision to litigate is not taken lightly. It is based on concrete evidence gathered during the investigation phase.

Here’s a snapshot of the process:

• Public records search
• Hiring investigators
• Analyzing digital footprint
• Collaboration
• Persistence

Navigating bankruptcy and using bank levies are also part of the enforcement arsenal. The outcome of this phase will guide whether to proceed with legal action or to continue with standard collection activities.

Closure of the Case

When the investigation concludes, a pivotal decision awaits. If the likelihood of recovery is deemed low, closure of the case is advised, absolving you of any financial obligation to our firm or affiliated attorney. Deciding not to pursue legal action allows for withdrawal of the claim at no cost, or continuation of standard collection efforts.

Should litigation be the chosen path, upfront costs become necessary. These typically range from $600 to $700, covering court and filing fees. In the event of unsuccessful litigation, the case will be closed without further dues.

The decision to close a case or proceed with litigation is critical and should be made after careful consideration of the feasibility of judgment recovery.

Our collection rates are structured to reflect the number of claims and age of accounts, ensuring competitive pricing:

Litigation Decision

When faced with a debtor declaring bankruptcy after a judgment, the decision to litigate is pivotal. Careful consideration of the potential for recovery is essential. If the investigation suggests unlikely recovery, closing the case may be the most prudent action. However, if litigation is recommended and you choose to proceed, be prepared for the associated costs.

Deciding against litigation allows for withdrawal of the claim with no fees owed. Alternatively, standard collection efforts can continue.

Should you opt for legal action, upfront costs will be incurred. These typically range from $600 to $700, depending on the jurisdiction. A lawsuit will then be filed to recover all monies owed. In the event of unsuccessful litigation, rest assured, you will owe nothing further.

DCI offers third-party debt recovery services with expertise in judgment enforcement, bankruptcy, and No-Recovery No-Fee service. Visit www.debtcollectorsinternational.com for more information.

Legal Action Details

Upfront Legal Costs

Entering the litigation phase requires a financial commitment. Clients must consider the upfront legal costs before proceeding. These costs cover court fees, filing charges, and other related expenses. Typically, the range is between $600 and $700, depending on the jurisdiction of the debtor.

If litigation is unsuccessful, the client is not left with additional financial burdens. The debt recovery system ensures that, in the event of failure, the client owes nothing further. This approach aligns with the firm’s commitment to a risk-averse strategy for its clients.

The decision to litigate is pivotal. Clients have the option to withdraw their claim at no cost or to invest in the pursuit of justice through the courts.

Here’s a breakdown of potential upfront costs:

• Court costs
• Filing fees
• Attorney’s fees for filing the lawsuit

Remember, these are investments towards recovering what is rightfully owed to you.

Filing a Lawsuit

Once the decision to pursue legal action is made, the creditor must be prepared for the associated costs. Upfront legal costs are a reality, typically ranging from $600 to $700. These fees cover court costs, filing fees, and other related expenses. Upon payment, a lawsuit is filed to recover all monies owed, including litigation costs.

Filing a lawsuit is a strategic move that requires careful consideration of the debtor’s assets and the likelihood of recovery. It’s essential to balance the efforts to recover debts with the potential costs involved to ensure a successful outcome.

The decision to litigate should be weighed against the debtor’s ability to pay and the anticipated recovery rate.

Remember, if litigation does not result in debt recovery, the case will be closed, and you will owe nothing further to the firm or affiliated attorney.

Outcome of Litigation

After the dust settles, the outcome of litigation is clear. Success means recovery of the owed amount, possibly including legal fees. Failure, however, does not leave you empty-handed. The debt collection process, with its initial contact, follow-up communication, and attorney engagement, ensures a thorough pursuit of your claim.

The decision to litigate is based on recovery rates and fees. Opting out at this stage incurs no financial obligation.

If litigation does not result in payment, the case is closed with no further cost to you. Our firm’s commitment to a no-recovery, no-fee policy stands firm. Below is a summary of collection rates post-litigation:

• Accounts under 1 year: 30% (1-9 claims) or 27% (10+ claims)
• Accounts over 1 year: 40% (1-9 claims) or 35% (10+ claims)
• Accounts under $1000: 50% regardless of claim count
• Accounts placed with an attorney: 50% regardless of claim count

Collection Rates

Rates for 1-9 Claims

When dealing with a smaller volume of claims, the collection rates are tailored to the specific circumstances of each account. Collection rates vary based on claim volume and the age or amount of the accounts. Typically, higher rates apply to smaller volumes, reflecting the increased effort required for individual account recovery.

For accounts that are less than a year old, the rate is 30% of the amount collected. Older accounts, over a year, see a rate increase to 40%. Smaller debts, those under $1000, incur a 50% rate due to the proportionate cost of recovery efforts. When legal intervention is necessary, and accounts are placed with an attorney, the rate is consistently set at 50% of the amount collected.

Economies of scale come into play with larger volumes, reducing the percentage rate. However, for 1-9 claims, partnering with an experienced agency is crucial for successful recovery.

Rates for 10+ Claims

When handling a larger volume of claims, economies of scale come into play. Bulk claims result in reduced rates, making the recovery process more cost-effective for creditors. For those submitting 10 or more claims, the rates are adjusted accordingly:

• Accounts under 1 year in age: 27% of the amount collected.
• Accounts over 1 year in age: 35% of the amount collected.
• Accounts under $1000.00: 40% of the amount collected.
• Accounts placed with an attorney: 50% of the amount collected.

Recovery service costs range from 27% to 50% of collected amount, with additional fees for attorney placement. Failed litigation results in no payment obligation. Phase one involves debtor contact and investigation.

The tiered structure incentivizes early action and larger claim batches. It’s crucial to consider the age of the accounts and the total number of claims to optimize collection efforts.

Maximize your recovery efforts with Debt Collectors International’s proven collection services. Our expert team is ready to assist you in reclaiming what’s rightfully yours. Don’t let unpaid debts affect your bottom line. Visit our website now to learn more about our no recovery, no fee policy and take the first step towards improving your collection rates. It’s time to turn your receivables into revenue—click below to get started!

Frequently Asked Questions

What is the recommendation process if a debtor declares bankruptcy after a judgment?

The recommendation process involves a thorough investigation of the case and the debtor’s assets. If recovery is unlikely, the case may be closed. If litigation is recommended, you have the option to proceed with legal action or withdraw the claim.

What are the upfront legal costs involved in filing a lawsuit against a debtor?

Upfront legal costs typically range from $600.00 to $700.00, including court costs and filing fees. If litigation fails, you owe nothing to the firm or affiliated attorney.

What are the collection rates for 1-9 claims?

For 1-9 claims, collection rates vary based on the age of the accounts and the amount owed. Rates range from 30% to 50% of the amount collected.

What are the collection rates for 10+ claims?

For 10+ claims, collection rates vary based on the age of the accounts and the amount owed. Rates range from 27% to 50% of the amount collected.

What happens if attempts to collect via litigation fail?

If attempts to collect via litigation fail, the case will be closed, and you owe nothing to the firm or affiliated attorney.

What are the phases of the recovery system for recovering company funds?

The recovery system consists of three phases: Phase One involves sending letters to debtors and contacting them for resolution. Phase Two includes forwarding the case to an affiliated attorney for further action. Phase Three involves recommendations for closure or litigation.