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Typical compensation for debt collection

A company is seeking to retain me for debt collection - a ra dingbat05/29/18
A single large debtor or a portfolio of deadbeats owing smal guyingorillasuit05/29/18
it'll be commercial. one debt, roughly $500k-$1m. With the dingbat05/29/18
At that level I would just treat it as ordinary commercial l midlaw05/29/18
and if the client insists on contingency (no win no fee)? dingbat05/29/18
Probably 40 or 33 depending on who fronts costs. That’s wh midlaw05/29/18
Midlaw is credited. Just 1 case. Contingent fee. If it's jeffm05/29/18
I would make the client pay the costs. Investigate the debto guyingorillasuit05/29/18
dingbat (May 29, 2018 - 2:42 pm)

A company is seeking to retain me for debt collection - a rather sizeable sum.

What would be a typical fee arrangement for this? Are there tiers?
Also, I've never done debt collection. Anything I need to know or be aware of before even agreeing to this?

What is the typical turnaround time for debt collection?
(assuming all the paperwork is in order)

Thanks

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guyingorillasuit (May 29, 2018 - 2:59 pm)

A single large debtor or a portfolio of deadbeats owing small sums each? Commercial or consumer? If a single debtor or several large debtors - are they solvent? Do they have assets? What are the specific facts?

If it's a bunch of small consumer debtors, I would not agree. You open yourself to FDCPA and other liability, and the upside is small.

There is a poster on here named Vohod, who does debt collection for a living. He may be able to chime in.

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dingbat (May 29, 2018 - 3:08 pm)

it'll be commercial. one debt, roughly $500k-$1m. With the promise of more debt collections in the future.
I don't yet have sufficient information, and something seems a little off.

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midlaw (May 29, 2018 - 3:18 pm)

At that level I would just treat it as ordinary commercial litigation. For that much money they are almost certain to have a contractual defense or you may have to navigate a commercial bankruptcy. 40% if firm fronts costs, 33% if the client pays out of pockets. Or just bill it hourly - probably the wiser move.

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dingbat (May 29, 2018 - 3:45 pm)

and if the client insists on contingency (no win no fee)?

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midlaw (May 29, 2018 - 4:35 pm)

Probably 40 or 33 depending on who fronts costs. That’s what we usually do.

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jeffm (May 29, 2018 - 4:46 pm)

Midlaw is credited. Just 1 case. Contingent fee. If it's a good case, and if you feel pressed to compete to get it, maybe the percentages can go lower.

Be prepared to litigate or bring in co-counsel who can.

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guyingorillasuit (May 29, 2018 - 5:28 pm)

I would make the client pay the costs. Investigate the debtor first, before you take the case on contingency. What type of business is the company in? Is there already a judgment (i.e. true debt collection)? Or are you going to sue to enforce a contract?

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