There are many fundamental differences between a collection agency and a collection law firm. These differences are vital tounderstand when one is trying to collect debt in big cities like New York. The first difference is the means that is used to collect payments which are voluntary in nature. In case of collection agencies, the attempt to collect voluntarypayments is done by drafting letters to the debtor or calling upon the debtor. In case of collection lawfirms, the process is also initiated by drafting our letters to the debtor. However, in case of a legal agency, the letters are drafted in legal letterhead and the attorney usually drafts out the letter instead of a lay person. Hence, the effect of such as legal communication can have more importance and impact than a usual letter from a collection agency.
While clients can ignore collection letters from that of agencies, letters from legal offices can instil fear in absconding clients and force them to comply on their due payments.
Following up on involuntary payments
In case of involuntary payments whereby the client is not responding, a collection agency usually obtains permission from the creditor who has obtained the services of the agency, to issue legal notices. The agency can retain a law firm on the consent of the creditor, whereas in case of a law firm, they can take action themselves in case of involuntary payments. The agency usually takes time to retain the services of a law firm to initiate action against the debtors who are absconding against their payments.
In case of a legal firm, they can take action immediately without much delay. The creditor who takes upon the services of a collections agency, will have to deal with the representatives of the agency and cannot directly interact with the lawyers who are taken up by the agency to take action against the debtors. In contrast, when a legal firm is employed by the creditor, then they can directly interact with the lawyers and be updated on the happenings of the cases directly. In either case, the importance of debt collection software cannot be diminished. The collections software is required by either agency or legal form to keep track of all the debtor details, their account information, payments due and so forth.
Additional power of legal firms
The efficiency of an agency and a legal firm may differ in the way they can get the outstanding payments from defaulting debtors. In case of collections agency, they can retain the services of a legal firm and they can get a legal order which is directed to the debtor to ask them to clear the pending payment. However, in caser the payment is not collected even after such a legal order is issued, a legal firm or collection firm can take necessary actions such as seizing the bank accounts and other assets of the debtor and even directing the employer of the debtor to send the wages of the debtor directly to the creditor. These are additional benefits that one can obtain from a legal firm. Such firms can also benefit of collections software to obtain details of the clients of a creditor on whose cases they need to work upon. The Debt Collections Software thus finds its way in such offices as well.