Non-payment in agricultural exports to China can pose significant challenges for companies. To address this issue, a comprehensive Recovery System for Company Funds has been developed, consisting of three key phases. Each phase plays a crucial role in the process of recovering funds from debtors in China. Let’s explore the key takeaways from this Recovery System:
Key Takeaways
- The Recovery System for Company Funds consists of three phases: Phase One, Phase Two, and Phase Three, each with specific actions and strategies to recover funds from debtors in China.
- Phase One involves initial contact with debtors, skip-tracing, and attempts to resolve the matter through various communication channels like phone calls, emails, and letters.
- Phase Two includes forwarding the case to affiliated attorneys for legal action if initial attempts to resolve the debt fail, with demand letters and direct contact with debtors.
- Phase Three offers two recommendations based on the likelihood of recovery: closure of the case if recovery is unlikely or proceeding with litigation, with associated legal costs and collection rates based on the age and amount of accounts.
- The Recovery System provides transparent rates for collection services, with different percentages based on the number of claims, account age, amount owed, and involvement of attorneys.
Recovery System for Company Funds
Phase One
Within the first 24 hours of initiating Phase One, a multi-pronged approach is set in motion to secure your company’s funds. Immediate action is taken to ensure that the debtor is aware of the outstanding debt and the urgency of resolution. A series of four letters is dispatched via US Mail as a formal notice.
Skip-tracing and thorough investigation are conducted to gather the most accurate financial and contact information on the debtors. Our collectors engage in persistent communication efforts, utilizing phone calls, emails, text messages, and faxes.
Daily attempts are made to contact the debtors during the critical first 30 to 60 days. If these efforts do not yield a resolution, the case escalates seamlessly to Phase Two, involving our network of affiliated attorneys.
The following table outlines the initial contact strategy:
| Day | Action |
|---|---|
| 1 | First letter sent and skip-tracing initiated. |
| 2-30 | Daily communication attempts via multiple channels. |
| 31-60 | Continued communication and preparation for potential legal action. |
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. This shift signifies a more formal approach to debt recovery. The attorney’s first action is to draft a series of authoritative letters, demanding payment on the firm’s letterhead. Concurrently, the attorney’s team initiates direct contact attempts through calls, aiming to resolve the matter swiftly.
If these intensified efforts do not yield a resolution, a critical decision point is reached. At this juncture, we provide a detailed report outlining the challenges encountered and our suggested course of action:
- Continue with standard collection activities (calls, emails, faxes).
- Proceed to litigation, with associated upfront legal costs.
The choice is yours, but it’s imperative to weigh the potential for recovery against the costs involved.
Should litigation be the chosen path, the following fees typically apply:
| Jurisdiction | Court Costs | Filing Fees |
|---|---|---|
| Debtor’s Location | $600 – $700 | Varies |
These fees are necessary to initiate legal proceedings and are exclusive of our competitive collection rates, which are contingent on the age and number of claims.
Phase Three
Upon reaching Phase Three, the path forward becomes clear. If the debtor’s assets and the case facts suggest a low recovery likelihood, we advise case closure—no fees incurred. Conversely, should litigation seem viable, a decision point arises.
Litigation entails upfront legal costs, typically $600-$700, based on jurisdiction. These cover court costs, filing fees, and more. Should you opt for legal action, our affiliated attorney initiates a lawsuit for the full debt amount, including filing costs. A failed litigation attempt results in case closure, with no additional charges to you.
Our competitive rates are tailored to the claim volume and age. The percentage of the amount collected varies, ensuring fairness and transparency.
Here’s a quick overview of our rates:
-
For 1-9 claims:
- Under 1 year: 30%
- Over 1 year: 40%
- Under $1000: 50%
- With attorney: 50%
-
For 10+ claims:
- Under 1 year: 27%
- Over 1 year: 35%
- Under $1000: 40%
- With attorney: 50%
Frequently Asked Questions
What is the Recovery System for Company Funds?
The Recovery System for Company Funds consists of three phases aimed at recovering funds owed by debtors. Phase One involves sending letters, skip-tracing, and contacting debtors. Phase Two includes involving affiliated attorneys to demand payment. Phase Three provides options for closure or litigation.
What happens if recovery is not likely in Phase Three?
If recovery is not likely in Phase Three, the case may be recommended for closure, and no fees will be owed. Alternatively, litigation may be recommended, requiring upfront legal costs. If litigation fails, no fees will be owed.
What are the rates for collection services?
The rates for collection services vary based on the number of claims and the age of the accounts. Rates range from 27% to 50% of the amount collected, depending on the specific circumstances.
What actions are taken in Phase One of the Recovery System?
Phase One involves sending letters to debtors, skip-tracing, investigating, and attempting to contact debtors through various means like phone calls and emails. If unsuccessful, the case proceeds to Phase Two.
What is the role of affiliated attorneys in Phase Two?
In Phase Two, affiliated attorneys draft letters demanding payment from debtors and attempt to contact them. If efforts to resolve the account fail, recommendations for further action are provided.
What are the options if legal action is recommended in Phase Three?
If legal action is recommended in Phase Three, the company has the choice to proceed with litigation by paying upfront legal costs. If litigation is unsuccessful, no fees will be owed.
