After falling behind on loan payments, delinquent Arkansas business owners and consumers with outstanding debts may find themselves speaking to a debt collection attorney who represents banks and financial institutions.
Debt collection in Arkansas for banks and financial institutions revolves around two primary options, debt collection agencies and debt collection attorneys. Unlike debt collection agencies, a debt collection attorney can utilize many more legal resources to encourage debtors to pay what they owe. When consumers begin falling behind on outstanding debt, banking institutions begin thinking about losses and recouping those losses. Hiring a debt collection attorney may be an alternative. The following factors must be taken into consideration before selecting a legal firm.
1. Does the Attorney’s Office Have Experience in Debt Collections? Are they CFPB Compliant?
Does the attorney’s office have experience collecting debts from delinquent consumers for other financial institutions? Do they practice in compliance with the Consumer Financial Protection Bureau’s federally mandated Fair Debt Collection Practices Act? If the answer to either of these is no, there is a problem. Most law firms have several attorneys capable of helping financial institutions obtain payment for outstanding debt. Banks may also request information about the success rates of the given attorney’s office for collecting the outstanding debt.
2. What Fees Are Associated with a Debt Collection Attorney?
Since attorneys have the legal backing and authority to file lawsuits against delinquent consumers, they may charge the bank a specific cost, usually a contingency fee, for filing such suits as well as the actual cost of filing. In addition, attorney’s fees may be required, in addition to a percentage of the amount of debt collected from delinquent consumers.
3. Will Legal Action Impact the Reputation of the Bank in a Negative Manner?
Every business decision, regardless of its connotation, impacts the net gain or loss of a financial institution, and it is well established that legal proceedings are a part of the financial industry. While large banks in large cities may escape any spotlight litigation may shine on them, small town banks could lose thousands if handled improperly. This is exactly why hiring an experienced debt collection attorney is such an important decision that should not be taken lightly.
4. Have Traditional Debt Collection Agencies Failed You in the Past?
After making an effort to resolve debt issues on their own, most companies will first turn to a collection agency in the hopes of avoiding legal action. Unfortunately, for the most part, these agencies will likely pursue the same steps against the debtor that the company may have already attempted and end up making little to no headway. Debt collection attorneys have the ability to utilize the law through the courts whereas a collection agency does not.
5. Is the Attorney’s Office Local?
This seems like it would be insignificant to delinquent consumers, but in the digital age, every phone call or contact a person receives could be a sign of a potential scam. Banks and financial institutions need to select law firms with a local office that would place delinquent consumer concerns over the legality of the collection attempt or fears of a scam at ease. Furthermore, a debt collection attorney can provide assistance with other matters that a financial institution may find themselves caught in, such as asset recovery for vehicle loans.
Attorneys are a valuable resource for Arkansas banks and financial institution debt collection. Before making the decision to hire a debt collection law firm, make sure to do your research using the five tips listed above. If you find your bank needing a group of experienced debt collection attorneys, please don’t hesitate to contact us online or call us toll free at 800-441-1935 or locally at 501-376-9131.