In the aerospace industry, the collection of overdue payments for component exports is a critical aspect of financial management. To address this issue, we have developed a comprehensive Recovery System with three distinct phases. Each phase is designed to maximize the chances of recovering company funds while providing clear guidance on the steps involved in the process. Let’s explore the key takeaways from each phase of the Recovery System.
Key Takeaways
- The Recovery System consists of three phases: Phase One, Phase Two, and Phase Three, each with specific actions and outcomes.
- Phase One involves initial contact with debtors, skip-tracing, and attempts to resolve the account within 30 to 60 days.
- Phase Two includes forwarding the case to affiliated attorneys for legal action if initial attempts to resolve the account fail.
- Phase Three offers recommendations based on the investigation of debtor’s assets and the possibility of litigation, with clear guidance on costs and potential outcomes.
- Competitive collection rates are tailored based on the number of claims submitted within the first week of placing the first account, with varying percentages based on the age and amount of the accounts.
Recovery System for Overdue Payments
Phase One
The initiation of the recovery process is critical. Immediate action is taken within the first 24 hours of reporting an overdue payment. A series of four letters is dispatched, and comprehensive skip-tracing begins to locate the debtor and gather essential financial information.
Our collectors engage vigorously, utilizing a mix of communication methods—phone, email, text, and fax—to reach a resolution. Daily attempts are made for the first 30 to 60 days, ensuring persistent contact and pressure.
If these efforts do not yield results, the case escalates to Phase Two, involving legal intervention. The transition is seamless, with an affiliated attorney stepping in to exert additional legal pressure.
The fee structure for this phase is straightforward, with rates based on the age of the account and the number of claims. For instance, accounts under a year old are charged at 30% of the amount collected for 1-9 claims. The rates are designed to be competitive, ensuring value for the services provided.
| Age of Account | 1-9 Claims | 10+ Claims |
|---|---|---|
| Under 1 year | 30% | 27% |
| Over 1 year | 40% | 35% |
| Under $1000 | 50% | 40% |
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. Immediate action is taken to draft and send a series of demand letters to the debtor, now with the added weight of legal letterhead. Concurrently, the attorney’s office begins persistent telephone outreach to negotiate payment.
If these intensified efforts do not yield results, a detailed report is provided to you. This report outlines the challenges encountered and advises on the potential for recovery or the necessity to proceed to Phase Three.
The following table summarizes the actions taken during Phase Two:
| Action | Description |
|---|---|
| Demand Letters | Series of letters drafted by attorney |
| Telephone Outreach | Persistent calls to negotiate payment |
Should the situation remain unresolved, the path forward includes a critical decision point: to litigate or not. The choice is yours, with our guidance to ensure the best possible outcome for your overdue payments.
Phase Three
Upon reaching Phase Three, the path forward hinges on a critical assessment. If the debtor’s assets and case facts suggest low recovery odds, case closure is advised—at no cost to you. Conversely, should litigation be the recommended route, a decision point emerges.
- If litigation is declined, you may opt for claim withdrawal or continued standard collection efforts.
- Choosing litigation incurs upfront legal costs, typically $600-$700, based on jurisdiction.
Upon litigation initiation, all owed monies are pursued, including filing costs. Failure to collect post-litigation results in case closure, absolving you of further financial obligation to our firm or affiliated attorney.
Our fee structure is straightforward and competitive, with rates varying by claim volume and age. For instance:
| Claims Submitted | Accounts < 1 Year | Accounts > 1 Year | Accounts < $1000 | Attorney Placed Claims |
|---|---|---|---|---|
| 1-9 | 30% | 40% | 50% | 50% |
| 10+ | 27% | 35% | 40% | 50% |
Transparency in fees ensures clarity in our partnership, as we navigate the complexities of overdue payment recovery in the aerospace component export sector.
Frequently Asked Questions
What is the Recovery System for Overdue Payments?
The Recovery System for Overdue Payments is a 3-phase system designed to recover company funds from debtors who have overdue payments. It involves a series of actions, including sending letters, skip-tracing, contacting debtors, and, if necessary, legal action.
What happens in Phase One of the Recovery System?
Phase One involves sending letters to the debtor, skip-tracing, investigating to obtain financial and contact information, and attempting to contact the debtor for resolution using various communication methods. If all attempts fail, the system moves to Phase Two.
What occurs in Phase Two of the Recovery System?
Phase Two involves forwarding the case to an affiliated attorney within the debtor’s jurisdiction. The attorney will draft letters demanding payment, contact the debtor, and provide recommendations for the next steps if attempts to resolve the account fail.
What is the recommendation in Phase Three of the Recovery System?
In Phase Three, the recommendation may be to close the case if recovery is not likely or to proceed with litigation. If the decision is to proceed with legal action, upfront legal costs such as court costs and filing fees will be required.
What are the rates for the Recovery System?
The rates for the Recovery System depend on the number of claims submitted within the first week of placing the first account. Rates vary based on the age and amount of the accounts, as well as whether accounts are placed with an attorney.
What happens if attempts to collect via litigation fail?
If attempts to collect via litigation fail, the case will be closed, and the company or affiliated attorney will not be owed anything.
