It’s bad enough not getting paid what you’re owed; it’s worse having to pay someone else to get paid; worst yet is not getting reimbursed for the costs of collecting the debt that is owed you. A New Jersey collections law firm can help explain the process and offer some recommendations.
Whether legal services are provided on a contingency basis or flat fee arrangement, what you will pay your New Jersey collections law firm is the most expensive part of a commercial collections action. Unfortunately, in New Jersey, the only way for a party to recover attorney fees is by statute, court ruling or by the terms of a contract. Even where a contract extending credit calls for the prevailing party to be able to recover attorney’s fees, the term “prevailing” may be questioned; did the party completely prevail? Did the opposing party prevail to some degree?Actual Court Costs Expended
On the other hand, actual court costs such as filing fees and service of process are recoverable and will routinely be included by your New Jersey collections attorney in the amount requested for final judgment.A Strategy for Settlement
A contract clause can provide potential leverage if it includes attorney fees and a collection law suit is won. If the debtor has a weak case as to why the debt is not owed or no argument at all, they may come to realize that it makes little sense to pursue a losing cause any further and run up more exposure. In such a scenario, your attorney may be able to persuade the debtor to pay the principle for an agreement to not go after the additional costs.
There is, of course, some risk in prevailing party provisions; you may not prevail. However, the advantages should be discussed with your legal counsel.
Contact our New Jersey Collections Law Firm for Legal Advice from an Attorney
The strategies involved in commercial collections can be an important factor in the financial health of a business. To learn what protections you can implement, call Snellings Law LLC at 973.265.6100.