• Debt Collection Attorney Vs Agency - What's the Difference?
  • July 29, 2009 | Author: Peter T. Roach
  • Law Firm: Roach, Peter T., & Associates, P.C., Attorneys at Law - Syosset Office
  • There are four major differences between a collection agency and a collection law firm:

    1. The Means Used to Collect Voluntary Payment

    A collection agency can attempt to collect voluntary payment by drafting collection letters to the debtor or by calling the debtor. While a collection law firm will also draft collection letters to the debtor and will also call the debtor, a law firm has the added benefit and influence of drafting letters on legal letterhead and having an attorney rather than a layperson call the debtor. Having an attorney contact the debtor, either on legal letterhead or over the telephone instills more fear in the debtor, which in turn makes the debtor more likely to respond (i.e. pay back the debt).

    2. Means to Collect Involuntary Payment

    If the debtor does not respond to a collection agency, the agency has to obtain permission from the creditor to retain a law firm to start legal action. If the creditor consents to the commencement of a suit, the agency then has to find and retain a law firm to commence a lawsuit against the debtor. This takes time and will result in a delay in the creditor obtaining payment on his debt. In addition, the creditor will incur both the cost of collecting the debt from the agency as well as the firm's legal fees.

    In contrast, if a creditor retains a collection firm, the creditor typically gives the collection firm authority to commence legal action in the retainer agreement. The collection firm can then immediately commence suit if the debtor does not respond to its efforts to collect voluntary payment. This avoids the delay of waiting for the creditor's consent to commence suit as well as the delay in retaining counsel.

    3. Creditor's Primary Contact

    If the creditor retains a collection agency to help him collect his debt, the creditor will be in contact with the representatives of the collection agency only. In the likely event the collection agency has to retain outside counsel to collect involuntary payment, the creditor will not have the benefit of speaking with either his attorney or any representative of the law firm that is working on his behalf.

    In sharp contrast, if the creditor retains a collection law firm, the creditor will be in constant contact with the debt collectors, his/her attorney and the support staff of the law firm working to collect his debt.

    4. Results

    The best result a collection agency can obtain for a creditor is a legal Judgment that orders the debtor to pay the debt. In the likely event the debtor fails to comply with the Judgment, The collection agency is unable to use any tools to actually collect payment.

    In contrast, a collection firm has the tools necessary to collect payment on the Judgment. For example, if the debtor does not pay the Judgment, the collection law firm can either locate the debtor's bank accounts and assets with use of specialized computer software or hire a tracker to locate the debtor's employer and garnish the debtor's wages directly from his/her employer. This means that the debtor's employer will pay the creditor the debtor's wages/salary instead of paying the debtor.


    Hiring a collection law firm to aid in collecting a debt will be more efficient and more cost effective with better results; i.e. actually collecting on your debt.

    Peter T. Roach is a New York debt collection attorney who enforces creditors' rights throughout New York State. For more information or assistance collecting debt in New York, visit http://www.roachlawfirm.com or call 1-516-938-3100.