I should first say that I am not an attorney and the information I share below is not intended to be construed as legal advice.
At SCS, our philosophy and practice is that litigation is a last resort and we make every effort to assist an individual with an unpaid debt in making the right choice. In some situations, when elements combine to make litigation an obvious course of action, SCS will assist our clients with this process.
The elements we refer to are as follows: 1) the individual (debtor) must have a verified ability to pay the debt. 2) The balance involved must be sufficient to merit the initial expense of a lawsuit. 3) The debt itself must be indisputable and well documented.
SCS only proceeds with litigation with the express and written permission of our clients. In most cases, the client advances fees for service of summons, filing fees and court costs. Currently this cost averages $250.00 however when a judgment is rendered in favor of the client, these cost are born by the debtor and added to the principal along with interest from the date services were rendered. The contingency fee to our client increases to 40% in most cases as SCS is responsible for paying our attorney for litigation services.
In many cases, the judgment is obtained through default when the debtor fails to appear in court however even when the debtor does appear, there is substantial likelihood a judgment will be rendered. Obtaining the judgment restarts the clock on the statute of limitations and prevents the debt from becoming uncollectible due to age. The strongest aspect of a judgment is that it becomes a part of the debtors credit bureau record and a judgment, in most cases, must be satisfied through full payment in order for many financial transactions such as the sale of the debtors home can occur. Upon a judgment being obtained, it is possible to have hearings in which the debtor must appear in court to demonstrate why the debt has not been paid. Other legal proceedings can occur to enforce payment of the creditor’s debt. The success ratio of collections in litigation is not 100% and the client should be aware that sometimes the money expended to file a lawsuit is lost. Also, in some cases, there is a prolonged delay before the judgment is paid.
Richard Bartlett,
President, SCS Collection Services, LLC
