Even $2500 may not be worth it depending on how many hours get racked up.

I hate using a collection agency but sometime they work. I think they typically take a percentage of what they collect. Be careful because many include that they can negotiate down the balance and you will end up with very little.

Small claim court may be best. You could go it alone and see what happens.

I would confront them in person.

A lot of law firms are in the collections business nowadays. Those are the folks we use. They're legally scarier than many of those collection agencies. Or you can write off the debt and sell the bad paper to firms like Cavalry or Midland Funding or the like. You'll be lucky to get 10 cents on the dollar, though.

I think Merrick Bank and the other credit card lenders use companies like Total Card Inc., AFNI and similar. But like others have said: they take a cut if they succeed.

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"Politics is just show business for ugly people."

Not sure how your state works, but in my state, small claims simply gives you a win in court stating the debtor owes you money. Small claims court is not in the collections business. It does give you rights to now potentially bring in other legal means with the Sheriff and whatnot for collection, but you still have to do the collection yourself. Still might be better than a collection agency, but it isn't like you would walk out of court with a check.

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Ryan

Go the small claims way. Sometimes just the threat of having to go to court shakes loose those pennies.

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"The great pleasure in life is doing what people say you cannot do."

To get the money on unsecured paper, you need to go to court and win a judgment and then enforce the judgment through wage garnishment if at all possible. A lot of law firms will do the legwork for a cut of the proceeds.

There's a whole "bad paper" industry out there nowadays that purchases the debt written or charged off by lenders and then drags the debtors into court (often as a last resort after first trying to "encourage" those debtors they have paper on to enter into payment plans or whatnot), obtains judgments and then enforces those judgments.

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"Politics is just show business for ugly people."

I'm not your lawyer. Get a lawyer. Ask JSA instead.

That's a tough price point.


For $2,500.00, a collections agency might buy the debt from you at a substantial discount. They'd then pursue the debtor for the full amount for their own account. Or, if you had a judgment (i.e., if you went to small claims and won) then you might be able to sell that for more money but nowhere near full value. The buyer would then have the right to seek to collect.

But, again, $2,500.00 is so relatively low that I don't know how much interest you'd get from a debt buyer.

Alternatively, you could go to small claims and get a judgment and then just sit on it. Here in California, judgments accrue interest at 10% per year. If you placed a judgment lien on the company's assets and then just sat on it, then in the event the assets were sold then the seller would have to pay you the principal and interest from the proceeds of the asset sale.

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War is god

Here in Pennsylvania, it is fairly cheap ($40-50) to file a claim in small claims court. For that, the debtor will get a very official notice to appear in court or a judgement in favor of the claimant will be filed.....which should appear on the person's credit bureau report. Another option is find an individual lawyer and pay them to write a "collection" letter with threat of lawsuit requesting payment.....lawyer should charge about $100. Try to avoid the collection agencies.....their success rate isn't that good and they will charge anywhere from 1/3 to 1/2 of anything they collect.

No shit?
I'm sitting on a $3300 claim from 7 years ago that I haven't been able to collect from a guy without insurance backing into me.

OP: I hired a collection company to collect. They tried for 30% fee. Then they went out of business lol.

The Fair Debt Collection Practices Act and later laws put a stop to a lot of the mischief those collection agencies used to engage in. Mostly, what they do nowadays is just bug the debtor to death through phones calls (unless they're told by the debtor that they can only communicate by mail) and mailings and keep hitting the debtor's credit bureau files with negative entries for the length of the statutory time allowed (something like 7 years or so, barring any affirmative action by the debtor to address the debt, which can often reset that time limit clock).

There are a ton of "debt brokers" out there who basically sell debtors' files to collection agencies, and as those debts age the agencies buying them tend to be the lowest of the low of bottom feeders in an industry full of them.

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"Politics is just show business for ugly people."

Thanks for all the tips and advice. To clarify, when I meant go after the $2500 aggressively, I really meant make an effort to go after it. (Coincidently, the woman who owed me $400 from six months ago called me out of the blue last night, apologized profusely, and paid by credit card over the phone. So there is something to be said about being nice at first until that ship has sailed). The guy who owes me $2500 is a lawyer so I doubt a scary letter from a law firm will scare him. I think I will go the small claims route first. If that doesn't work, then a collection agency. Even if it's pennies on the dollar, it will be more than I would likely get from trying on my own. And someone else can bother him, ding his credit, send him letters, etc. He'll be out of my mind. The guy was an asshole and a bully to my staff. I was close to firing him as a client and should have gone with my gut right away. Live and learn.

You will find that small claims court will be a complete waste of your time and you will flush a few hundred dollars down the toilet trying to serve him after the judgment is granted.

Visit his office.

I'm not your lawyer. Get a lawyer. Ask JSA instead.

Depending on the state, yes, no shit. That said, California (and probably other states) requires you to march down to the courthouse every X years to renew the judgment. It's a simple process. If you don't renew then the judgment expires and you're SOL. But if you do renew it then every time you do so you get to capitalize the interest (i.e., add the accrued interest to the outstanding principal so that interest now accrues on the unpaid interest). It can be lucrative if you've got a judgment against the right debtor.

http://www.courts.ca.gov/8207.htm

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War is god

I'm not your lawyer. Get a lawyer. Ask JSA instead.

Most lawyers are sedentary and are at their desk much of the week. And if he's ducking service then the laws provide for that circumstance.

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War is god

Lawyers can be a real PIA, especially the assholes. Before you sue, seriously ask yourself whether your nose is clean, or might the lawyer counter-sue and say things like you did a terrible job and didn't earn the fees. And perhaps worse, that he overpaid you and you really owe him money....

2500 is not a lot of money. Might consider chalking this up as a somewhat pricey but not terribly expensive life lesson (e.g., don't work for lawyers, or get up front payment when dealing with them).

Good luck.