Navigating non-payment in green building projects can be a challenging task for companies. Having a structured recovery system in place is crucial to ensure the successful collection of funds. In this article, we will explore a 3-phase Recovery System for Non-Payment in Green Building Projects and discuss collection rates for such projects.
Key Takeaways
- A 3-phase Recovery System is essential for navigating non-payment in green building projects.
- The Recovery System includes detailed steps from initial contact to potential litigation.
- Rates for collection in green building projects vary based on the number of claims and age of the accounts.
- For 1 through 9 claims, collection rates range from 30% to 50% of the amount collected.
- For 10 or more claims, collection rates range from 27% to 50% of the amount collected.
Recovery System for Non-Payment in Green Building Projects
Phase One
The initiation of the recovery process is critical. Within 24 hours of a non-payment report, a multi-channel communication blitz begins. Debtors receive the first of four letters, while our team conducts a thorough skip-trace to gather essential financial and contact information.
Persistence is key. Daily attempts to reach a resolution through calls, emails, and other means are standard for the first 30 to 60 days. Should these efforts not yield results, the case escalates to Phase Two, involving legal intervention.
The goal is clear: establish contact, communicate urgency, and secure payment without delay.
| Action | Timeline |
|---|---|
| Initial Letter Sent | Within 24 hours |
| Skip-tracing | Concurrently |
| Daily Contact | First 30-60 days |
If the debtor remains unresponsive, the strategy shifts from direct communication to preparation for potential legal proceedings.
Phase Two
Upon escalation to Phase Two, the legal gears begin to turn. A local attorney within our network takes the helm, drafting a series of demand letters and initiating direct contact with the debtor. The attorney’s letterhead adds a layer of seriousness to the proceedings, signaling a step-up from the initial collection efforts.
- The attorney sends the first demand letter immediately.
- Concurrently, attempts to reach the debtor via phone commence.
Should these intensified efforts fail to yield results, a transparent communication outlining the challenges and recommended next steps is sent to you. This ensures you are fully informed and prepared to either proceed to Phase Three or reassess your strategy.
Phase Three
At the crossroads of Phase Three, the path forward hinges on a critical evaluation. If the debtor’s assets suggest recovery is improbable, the recommendation is to close the case, incurring no fees. Conversely, should litigation appear viable, a choice presents itself.
Opting out means withdrawing the claim without cost. However, choosing to litigate necessitates upfront legal fees, typically between $600 to $700. These cover court costs and filing fees, with the understanding that unsuccessful litigation leads to case closure, free of any further financial obligation.
The decision to litigate is pivotal, demanding careful consideration of potential outcomes and costs involved.
The financial commitment to litigation is outlined below:
| Legal Action | Upfront Cost |
|---|---|
| Decision to Litigate | $600 – $700 |
| Unsuccessful Litigation | No additional fees |
Remember, the goal is to navigate non-payment with strategic precision, balancing the prospects of recovery against the costs of legal action.
Collection Rates for Green Building Projects
Rates for 1 through 9 Claims
When dealing with fewer than ten claims, the collection rates for green building projects are structured to reflect the age and size of the account. The younger and larger the account, the lower the fee. For accounts less than a year old, the rate is set at 30% of the amount collected. This rate escalates to 40% for accounts that have aged beyond a year.
For smaller accounts, specifically those under $1000, the collection rate jumps to 50%. This higher rate accounts for the increased effort required to collect on smaller debts. Similarly, if an account requires legal intervention and is placed with an attorney, the collection rate remains at 50%, regardless of the account’s age or size.
| Account Age | Account Size | Collection Rate |
|---|---|---|
| Under 1 year | Any | 30% |
| Over 1 year | Any | 40% |
| Any age | Under $1000 | 50% |
| Any age | Placed with attorney | 50% |
It’s essential to understand these rates as they directly impact the return on your receivables. A strategic approach to managing claims can optimize recovery and minimize costs.
Rates for 10 or More Claims
When dealing with a volume of 10 or more claims in green building projects, the collection rates become more favorable. Bulk submissions can lead to significant savings in recovery efforts. Here’s a breakdown of the adjusted rates:
| Age of Account | Collection Rate |
|---|---|
| Under 1 year | 27% |
| Over 1 year | 35% |
| Under $1000 | 40% |
| With Attorney | 50% |
Economies of scale play a crucial role in reducing collection costs. The more claims you submit, the lower the percentage you’ll pay upon successful collection.
It’s essential to understand that while the rates are more competitive, the commitment to rigorous pursuit of owed funds remains unwavering. The goal is always full recovery, regardless of the number of claims.
Frequently Asked Questions
What is the Recovery System for Non-Payment in Green Building Projects?
The Recovery System for Non-Payment in Green Building Projects consists of three phases. Phase One involves sending letters, skip-tracing debtors, and contacting them for resolution. Phase Two includes forwarding the case to affiliated attorneys if initial attempts fail. Phase Three offers recommendations for closure or litigation based on investigation results.
How does Phase One of the Recovery System work?
Phase One includes sending letters to debtors, skip-tracing for information, and contacting them via various methods like phone calls, emails, and faxes. Collectors make daily attempts to resolve the account within the first 30 to 60 days.
What happens in Phase Two of the Recovery System?
In Phase Two, the case is forwarded to affiliated attorneys who draft letters demanding payment from debtors. Attorneys also attempt to contact debtors and provide recommendations for next steps if initial attempts fail.
What are the options in Phase Three of the Recovery System?
In Phase Three, the options include closing the case if recovery seems unlikely without any payment obligations, or proceeding with litigation by paying upfront legal costs. If litigation fails, there are no payment obligations to the firm or affiliated attorney.
How are the collection rates determined for Green Building Projects?
The collection rates for Green Building Projects vary based on the number of claims submitted within the first week. Rates differ for accounts under and over 1 year in age, accounts under $1000.00, and accounts placed with an attorney.
What are the rates for 10 or more claims in Green Building Projects?
For 10 or more claims, the rates vary for accounts under and over 1 year in age, accounts under $1000.00, and accounts placed with an attorney. The rates are lower compared to 1 through 9 claims.
