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Recovering Payments for Delayed Shipments in NAFTA Regions

Delayed shipments can have a significant impact on a company’s finances and operations. Recovering payments for delayed shipments in NAFTA regions requires a strategic approach and a thorough understanding of the recovery system. In this article, we will explore the three phases of the recovery system and the key takeaways for companies dealing with delayed payments in NAFTA regions.

Key Takeaways

  • Understanding the 3-phase Recovery System
  • Importance of thorough investigation in Phase One
  • Considerations for legal action in Phase Three
  • Cost implications of recovery process
  • Tailored collection rates for different types of claims

Recovery System Overview

Phase One

The initiation of the recovery process is critical. Within 24 hours of a claim being filed, a multi-channel communication strategy is deployed. Debtors receive the first of four letters, while our team conducts thorough skip-tracing to gather essential financial and contact information.

Efforts to resolve the claim are persistent, with daily attempts encompassing phone calls, emails, text messages, and faxes. This aggressive approach is designed to yield results swiftly, typically within the first 30 to 60 days. Should these efforts not lead to a resolution, the case escalates to Phase Two, involving legal intervention.

The goal is clear: engage the debtor promptly and push for a quick resolution.

Here’s a snapshot of the initial actions taken:

  • Sending the first notification letter via US Mail
  • Conducting skip-tracing and investigations
  • Initiating contact through various communication methods

If resolution remains elusive after exhaustive attempts, the process seamlessly transitions to the next phase, ensuring no momentum is lost.

Phase Two

Upon escalation to Phase Two, the case is transferred to a local attorney within our network. Immediate action is taken to draft and send a series of demand letters on law firm letterhead. Concurrently, the attorney’s team initiates direct contact attempts via telephone.

If these efforts do not yield a resolution, a detailed report is provided to the client, outlining the challenges encountered and suggesting potential next steps.

The process is marked by a persistent and rigorous approach:

  1. Drafting of demand letters by the attorney.
  2. Persistent telephone contact attempts.
  3. Issuance of a comprehensive case report upon persistent non-resolution.

Should Phase Two fail to secure payment, the client is briefed on the situation and advised on the feasibility of proceeding to Phase Three, which may involve litigation or case closure.

Phase Three

At the crossroads of Phase Three, the path forward is clear-cut. Decisive action is required based on our comprehensive assessment of the debtor’s financial landscape and the potential for recovery. Two distinct recommendations emerge:

  1. Closure of the case when prospects of recovery are dim, with no financial obligation to our firm or affiliated attorneys.
  2. Advancement to litigation if the potential for recovery justifies legal proceedings.

Should litigation be the chosen route, clients are apprised of the necessary upfront legal costs, typically ranging from $600 to $700. These costs cover court fees and filing expenses, essential for initiating a lawsuit to reclaim the owed amounts.

The decision to litigate or withdraw rests solely with the client, with the option for continued standard collection efforts if litigation is not pursued. Our fee structure is transparent and competitive, ensuring alignment with the client’s best interests:

Claims Submitted Accounts < 1 Year Accounts > 1 Year Accounts < $1000 Attorney Placed Claims
1-9 30% 40% 50% 50%
10+ 27% 35% 40% 50%

In the event of unsuccessful litigation, clients are not beholden to any further financial commitments to our firm or the attorneys involved.

Frequently Asked Questions

What is the Recovery System Overview?

The Recovery System Overview consists of three phases designed to recover Company funds from delayed shipments in NAFTA regions.

How long does Phase One last?

Phase One lasts for 30 to 60 days, during which daily attempts are made to contact the debtors and resolve the account.

What happens in Phase Two?

In Phase Two, the case is forwarded to an affiliated attorney within the debtor’s jurisdiction, who will draft letters and make attempts to contact the debtor to resolve the account.

What are the options in Phase Three?

In Phase Three, the options include recommending closure of the case if recovery is not likely or proceeding with legal action, which requires upfront legal costs.

What are the rates for recovery services?

The rates for recovery services depend 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.

What are the fees for legal action?

The upfront legal costs for legal action range from $600.00 to $700.00, depending on the debtor’s jurisdiction, and are required if the decision is made to proceed with legal action.


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