According to data provided by the Federal Reserve Bank of New York, American households have nearly $16 trillion in collective debt. Businesses small and large owe trillions more in debt. While debt is not necessarily a bad thing, it can become a serious problem if the debtor struggles to keep up with their payments. Lenders and creditors need to collect the money they are owed.
This raises an important question: Should you hire a collection agency or a debt collection attorney? For most, there are benefits to hiring an attorney. Below you will find an explanation of the difference and an overview of some of the advantages of hiring a New Jersey collections lawyer instead of a debt collection agency.
What is the Difference Between a Collection Lawyer and a Collection Agency?
A collection lawyer is a state-licensed attorney who represents a lender, creditor, or company in a matter related to debt. In effect, this means that a debt collection lawyer can file a lawsuit against the individual or company that owes money. A collection lawyer can represent you in pre-suit negotiations and in any actual legal proceedings.
A collection agency is a company that works on behalf of a lender or creditor. An agency can engage in debt collection efforts—including making phone calls and sending letters. However, an agency cannot file a lawsuit on your behalf. Their authority is limited to non-legal matters. Only an attorney can represent you in court.
Four Reasons to Choose an NJ Debt Collection Attorney Over an Agency
1. A Demand Letter from a Debt Collection Attorney is More Likely to Get Results
As defined by Black’s Law Dictionary, a demand letter is a “formal document sent by one party to another in order to resolve a dispute.” It is one of the most important tools for creditors trying to collect on outstanding debt. You can use a demand letter to inform the debtor of exactly what they owe and the precise steps that they need to take in order to resolve that matter.
Both collection agencies and collection lawyers have the ability to send demand letters. That being said, a demand letter is far more likely to get successful results when it is sent by an attorney. Not only will a lawyer ensure that your demand letter is legally sound, but they will be in a position to take action (file a lawsuit) if necessary.
2. A Debt Collection Lawyer Can Often Collect on Debts More Quickly
When individuals or businesses fall behind on their financial obligations, it can be difficult to get them to pay. Creditors who have dealt with delinquent borrowers know this well. A New Jersey collections lawyer can often collect on debts more quickly than an agency. The primary reason for this is that many people with delinquent debts do not truly start taking the case seriously until legal action is initiated. With a collection agency, it may be a while before you are in a position to file a lawsuit.
3. You Can Often Save Money With a Debt Collection Lawyer
Hiring an NJ collection attorney directly is often more cost-effective than retaining a collection agency first. This is true for a number of different reasons, including the fact that collection lawyers are better able to recover more money, more quickly from the delinquent borrower. Beyond that, debt collection agencies are lightly regulated. Many of them charge very high fees to their clients. In some cases, lenders/creditors work with a collection agency first only to realize that they will need to hire a lawyer later on in the process. It is more efficient to get a lawyer at the beginning of the case.
4. A Debt Collection Lawyer Can Take Your Case the Distance
Finally, it is important to emphasize that a New Jersey debt collection lawyer has the legal authority to take your case the distance. If you need to file a lawsuit to collect on the debt, a New Jersey collection attorney can do so. They will be able to represent you through pre-suit collection efforts, post-suit settlement negotiations, and in court.
Contact a Smart Debt Collection Attorney in New Jersey Today
At Snellings Law LLC, our collection lawyers in NJ have the professional skills and legal experience that you and your business can rely on for results. If you have any questions about the New Jersey debt collection laws, we are more than ready to help. Call us now or use our online contact form to set up a fully confidential initial consultation. With a law office in Parsippany, we provide debt collection services throughout the State of New Jersey.