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Navigating Payment Delays in Metal Supply

Navigating payment delays in the metal supply industry can be a complex and challenging process. With the implementation of a 3-phase Recovery System, companies can take strategic steps to recover funds owed to them. Understanding the recovery process and collection rates is crucial for effectively managing payment delays and ensuring financial stability. In this article, we will explore the Recovery System Overview and Collection Rates in detail to provide valuable insights for navigating payment delays in metal supply.

Key Takeaways

  • The Recovery System consists of three phases: Initial Recovery Process, Legal Intervention, and Recovery Recommendations.
  • Phase One involves sending letters to debtors, skip-tracing, and daily attempts to contact debtors for resolution.
  • Phase Two includes forwarding cases to affiliated attorneys, demanding payment, and pursuing legal action if necessary.
  • Phase Three offers recommendations for case closure or litigation, with associated costs and potential outcomes.
  • Collection rates vary based on the number of claims and the age of accounts, with different percentages for amounts collected.

Recovery System Overview

Phase One: Initial Recovery Process

The clock starts ticking immediately. Within the first 24 hours of a reported delay, a multi-channel communication blitz is launched. Debtors will receive the first of four letters, while our team conducts a thorough skip-trace to gather the most current financial and contact information.

Efforts to resolve the issue are persistent and varied, involving:

  • Phone calls
  • Emails
  • Text messages
  • Faxes

Daily attempts are made to engage with the debtor, aiming for a swift resolution. This intensive 30 to 60-day period is crucial for setting the tone of recovery.

Should these efforts not yield the desired results, the case escalates to Phase Two, where legal expertise comes into play. The transition is seamless, with an affiliated attorney stepping in to exert additional pressure through legal channels.

Phase Two: Legal Intervention

When initial recovery efforts hit a wall, legal intervention becomes the necessary next step. At this juncture, the case is handed over to a local attorney within our network. The attorney’s first action is to send a series of demand letters to the debtor, leveraging the weight of legal letterhead to prompt payment.

The attorney’s involvement escalates the seriousness of the situation, signaling to the debtor the imminent legal consequences of non-payment.

If the demand letters and persistent phone calls do not yield results, we provide a clear analysis of the case. This includes the debtor’s financial status and the likelihood of successful recovery. Based on this, we advise on whether to proceed to Phase Three or to close the case, with no additional cost incurred for unsuccessful attempts.

Collection Rates for Legal Intervention

Age of Account Rate of Collection
Under 1 year 50%
Over 1 year 50%
Under $1000 50%

The decision to move forward with litigation is a significant one, involving upfront legal costs. However, should litigation not result in recovery, clients are not responsible for any further fees to our firm or the affiliated attorney.

Phase Three: Recovery Recommendations

When the initial recovery efforts and legal interventions have been exhausted, it’s time to consider the final recommendations. Decisive action is paramount; the choice is clear-cut. Either close the case if the likelihood of recovery is low, or proceed with litigation if the debtor’s assets suggest a favorable outcome.

Litigation is not a step to be taken lightly. It involves upfront costs, typically ranging from $600 to $700. These costs cover court fees, filing fees, and other related expenses. Should you choose to litigate, our affiliated attorney will aggressively pursue all owed monies.

Should the litigation path not yield results, rest assured, you will not be further indebted to our firm or our affiliated attorney.

The decision to litigate or close the case should be informed by a thorough assessment of the debtor’s financial status and the potential for recovery. Below is a summary of the potential costs associated with litigation:

Expense Type Estimated Cost
Court Costs $300 – $400
Filing Fees $300 – $350

Remember, the goal is to maximize recovery while minimizing additional financial risk. Choose wisely.

Collection Rates

Rates for 1 through 9 claims

When submitting between one to nine claims, the collection rates are structured to reflect the age and value of the accounts. The younger the debt, the lower the fee—a principle that incentivizes early action. For accounts less than a year old, the rate stands at 30%, while those aging over a year incur a 40% fee. It’s crucial to note that smaller accounts, specifically those under $1000, and any accounts requiring legal intervention are subject to a 50% collection rate.

Account Age Collection Rate
Under 1 year 30%
Over 1 year 40%
Under $1000 50%
Legal action 50%

The tiered rate system is designed to balance the urgency of recovery with the complexity of the claim. It’s a strategic approach to ensure that your efforts in reclaiming funds are both effective and equitable.

Rates for 10 or more claims

When dealing with a volume of 10 or more claims, the collection rates become more favorable. Bulk submissions can significantly reduce costs, ensuring a more efficient recovery process. The rates are structured to incentivize larger batches of claims, reflecting the economies of scale in debt recovery operations.

Age of Account Rate of Collection
Under 1 year 27%
Over 1 year 35%
Under $1000 40%
With Attorney 50%

Volume matters in debt collection. The higher the number of claims, the lower the percentage you pay upon successful collection. This tiered approach is designed to accommodate clients with a substantial number of accounts receivable delays.

The goal is to maximize recovery while minimizing costs. A strategic approach to submitting claims can lead to more favorable outcomes for your business.


In conclusion, navigating payment delays in metal supply can be a complex and challenging process. However, with a well-structured recovery system in place, companies can effectively recover funds owed to them. The three-phase recovery system outlined in this article provides a clear and systematic approach to dealing with payment delays, offering options for resolution at each stage. By understanding the recovery process and the associated costs, companies can make informed decisions about pursuing legal action or continuing with standard collection activities. It is important for companies to carefully consider their options and choose the most suitable approach based on the specific circumstances of each case. Overall, having a comprehensive recovery system in place is essential for managing payment delays and ensuring the financial stability of metal supply businesses.

Frequently Asked Questions

What is the Recovery System Overview?

The Recovery System is a three-phase process designed to recover company funds. Phase One involves sending letters to debtors, skip-tracing, and attempting to contact debtors for resolution. Phase Two involves legal intervention by forwarding the case to affiliated attorneys. Phase Three provides recovery recommendations, including closure of the case or proceeding with litigation.

What are the Collection Rates?

The collection rates depend on the number of claims submitted within the first week of placing the first account. For 1 through 9 claims, the rates vary based on the age and amount of the accounts. For 10 or more claims, the rates also vary based on the age and amount of the accounts.

What happens if all attempts to resolve the account fail in Phase One?

If all attempts to resolve the account fail in Phase One, the case is immediately forwarded to one of the affiliated attorneys within the debtor’s jurisdiction for legal intervention in Phase Two.

What are the recovery recommendations in Phase Three?

The recovery recommendations in Phase Three include either closure of the case if the possibility of recovery is not likely, or proceeding with litigation if the recommendation is to pursue legal action.

What are the upfront legal costs if proceeding with legal action in Phase Three?

If proceeding with legal action in Phase Three, the upfront legal costs such as court costs and filing fees typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction.

How are the collection rates determined?

The collection rates are determined based on the number of claims submitted within the first week of placing the first account, and vary based on the age and amount of the accounts.


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