Debt collection can be a very difficult process, especially if you go through it alone. Working with a debt collection attorney, in this case, can greatly help your case and make the process much easier for you.

When individuals and legal entities have given up their own attempts to collect a debt, then contacting a debt collection lawyer will be the best solution.

A debt collection attorney is a type of lawyer who helps businesses and individuals legally collect payment from debtors who have not cooperated in paying off a debt. To become debt collection attorneys, candidates must graduate from law school and earn a Juris Doctor degree; then they must pass the bar examination to obtain a state license.


What does a debt collection lawyer do?

A debt collection attorney has a range of legal remedies to pursue debtors who refuse to pay.

It does not use harassing phone calls and usually does not report late payments or defaults to credit bureaus.

A debt collection attorney works in the following ways: 

  • Send to the debtor a demand letter threatening legal action;
  • Initiatie a lawsuit against the debtor;
  • Obtain a money judgement;
  • Enforce a monetary judgement;

Enforcing the money judgement is the going through legal process for obtaining information on the debtor's assets, seize them, and using those assets to satisfy judgement obligation.

If the parties reach an agreement on the payment of the debt, the debt collection lawyer prepares a written settlement agreement. If the debtor is able to pay the debt only by making monthly installment payments, then the lawyer can create a written contract indicating the terms of payment, interest and the amount of the attorney's fee in the event of default.

How much does a debt collection lawyer cost?

Debt attorneys use a variety of remuneration schemes, and payment structures are agreed in advance and usually take into account the size of the debt, the debtor's ability to pay, and the debt's default period.

  • Flat fee

A flat fee is charged for all necessary negotiations until the debt situation is settled.

The cost of a lawyer for this type of fee depends on the number of loans and their types. Typically, the flat fee for a debt collection attorney ranges from $500 for simple, uncomplicated debt negotiations to more than $5,000 for more complex negotiations.

The average price of a debt collection attorney in New York ranges from $965 to $1,550 for a medium-sized case.

Also, a debt collection lawyer may charge a flat fee if the client needs to provide a specific service, and not bring the case to settlement. For example, draft a settlement proposal. This is called the Sharing Service. Some of these services can cost as little as $100-$200.


  • Hourly fee

The hourly fee includes the hourly fee. Payment can be made after the fact or the lawyer can demand an advance payment to start negotiations. The hourly rate of a lawyer depends on experience and the state where he lives.

The average debt collection attorney's rate ranges from $125 to $350 per hour.


  • Percentage of the amount of debt

The attorney can form his fee based on the amount of your debt. It usually looks like a percentage of the amount owed. In this scheme, the lawyer gets paid only after winning the lawsuit and actually collecting the debt. Usually, the interest rate is 33%, but sometimes it can vary from 15% for large debts to 50% for small debts.

If the lawsuit has been won, but the debtor has no money or property to pay the debt, then the lawyer will not be able to collect his fee.


  • Percentage of the amount that will be saved in the settlement process

Just like a fee scheme based on a percentage of the amount owed, a lawyer can use a percentage scheme that he will save you in settling.

In this scheme, the lawyer's fee increases in parallel with the amount that you end up saving.


Debt collection methods

The lawyer's goal is to collect the debt, either by paying cash or by selling goods owned by the debtor.

Sometimes, to pay the debt, a phone call or a letter for the debtor is enough, but often, the attorney initiates lawsuits so that the debtor pays the debt in full or agrees to the terms of the settlement agreement.

In the event that a settlement is not reached, a judgment may be obtained. As practice shows, this is the most efficient method.

Statistically, bad debts make up 60% of all money owed to the average small company.


Advantages of a debt collection attorney over a collection agency

The most important advantage is the right to file a claim. An attorney has the right to bring the debtor to court, but this is often not necessary. First, the debtor will be asked to negotiate with a debt collection lawyer.

When is it necessary to hire a debt collection lawyer?

  • If you need to perform a limited set of services (send a letter to the debtor);
  • If you tried to help the collection agency, but it did not work;
  • If you want that your case go to court, regardless of the costs and time involved;
  • The debt is large enough to justify the expense;

The lawyer rarely takes the case worth less than $1,000.


How to choose a good debt collection attorney?

  • Look for a lawyer who specializes in debt collection.
  • Make sure the lawyer has sufficient work experience. Find out what kind of education he has, how many debt cases he handled, how much he won and for how much?
  • Check the website of the lawyer or law firm he works for. A true professional will have a detailed website with lots of useful content.

Where to go to hire a debt collection lawyer?

Sharova Law Firm - Your cooperation partner.

If it so happened that you need to find a guaranteed way to repay the debt, then Sharova Law Firm is ready to help you with this.

Great practical experience, highly qualified specialists, free consultation and timely contact and support 24/7 - all this we offer to our customers. Call us and we will help you: 212-321-0741.

founderCompany founder and lawyer YELENA SHAROVA

As an experienced negotiator, after a decade of experience as a trial lawyer, she founded Sharova Law Firm in New York.

Ms. Sharova has brought together a team of smart, experienced and dynamic lawyers in her firm.

Ms. Sharova received her J.D. from the Touro College Jacob D. Fuchsberg Law Center in Central Islip, N.Y. and her Bachelors in Business Administration in Finance and Instruments from Baruch College’s Zicklin School of Business, CUNY, in New York, N.Y.

She is a member of the American Bar Association, New York Bar Association, Queens Bar Association, Brooklyn Bar Association, New York City Bar Association, New Jersey Bar Association, and United States Supreme Court Bar Association.



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