Debt Collections In United States

Collection Agency Service United States maintains two tiers within its American collection process. The first is dedicated to an amicable resolution of the debt, while the second is focused on legal proceedings that are designed to help enforce and collect the debt. Amicable collection allows Collection Agency Service US to pursue the full outstanding balance of the debt, plus any interest or collection costs and attorneys’ fees.

The legal collections process involves the filing of a lawsuit against the debtor. This will allow us to pursue only the outstanding balance of the debt, unless an agreement exists between the creditor and debtor that allows us to pursue any interest and collection costs that were incurred before the judgment, as well as any attorneys’ fees that should be paid by the debtor.

Amicable collection

Collection Agency Service United States pursues the first phase of the collections process using its own in-house team of professional staff members. Their job is to pursue debtors as thoroughly as possible with the constraints of United States laws that have been passed at the federal, state, and local levels. Our job during this task is to focus on creating a healthy relationship between the creditor and the debtor in order to ensure payment of the debt.

Our professional staff makes sure to work with our clients in an efficient and timely manner, working to collect debts as quickly and effectively as possible. Our collection agents are also charged with extensively documenting the debtor’s file as collections activities proceed, as this is a key part of our legal defense if we must pursue legal action against the debtor if the amicable phase does eventually fail.

Upon the failure of the amicable phase of collections, Collection Agency Service United States will immediately proceed to the legal phase of the process.

Legal collection

After the failure of the amicable phase, the collections process proceeds to a second tier that involves legal collections professionals. This is not handled in-house by Collection Agency Service United States, however, as the United States has a large and capable network of dedicated legal collectors who are involved with an extensive network of collection attorneys. These attorneys serve large geographical regions, including the continental United States, the Caribbean, Alaska, and Hawaii.

It is the policy of Collection Agency Service United States to work primarily with attorneys who are members of at least one law list. These lists are responsible for independently assessing and bonding potential attorney members, and this ensures that attorneys are committed to collections, getting the job done quickly, and using their experience as a key source of leverage against American debtors. It also ensures that they are the most effective and experienced collection attorneys serving their immediate geographic area or region of the country, and that bodes well for clients of Collection Agency Service US.

Legal System

The United States legal system is divided into 51 separate components, based on the number of states and the territory of Puerto Rico. This 51-part system is further divided into federal courts, district courts, and a number of local and state courts that handle matters of debt collection and judgment enforcement.

Statutes of Limitations

The Statute of Limitations in the United States sets a time period after which a debt cannot be pursued by the creditor or reasonably collected from the debtor. This period of time is not universal, however, and it varies on a state-by-state basis. The shortest Statute of Limitations currently allowed by any state is two years, while the longest such limitation is six years. For those debts involving a written contract, the limitation typically expires after between 3 and 10 years.

Attorney Process

Just like Collection Agency Service United States seeks to make amicable payment arrangements with debtors throughout the country during the first tier of collections, the attorneys we hire for the legal tier of collections are also required to make amicable efforts toward collecting payment of the debt. This good faith effort must be pursued before a lawsuit can be filed in court on behalf of the creditor. Typically, this amicable collection effort lasts only seven days, though some attorneys due attempt amicable collection efforts for as long as 30 days from the time the case is delivered to them by Collection Agency Service United States. The length of this period will also depend on the attorney’s ability to make contact with the debtor.

Attorney Costs and Fees

Unlike many countries around the world, the United States allows collection attorneys to be hired based on a contingency fee plan. This allows any attorneys’ fees to be paid only if, or when, the case has been a success for the creditor in court. This rule is relatively universal, but an exception does apply if the case becomes heavily disputed or if the debtor files a countersuit against the creditor that the attorney is representing. If this becomes the case, the attorney will change their fee structure from a contingency rate to an hourly rate. Often, a retainer will be required to keep the attorney’s services throughout the rest of the case.

In the event that the attorney hired by Collection Agency Service US has made no successful contact with the debtor who is facing legal action, or if the debtor continues to refuse to pay toward the debt’s outstanding balance, our attorney will submit a copy of his recommendations to us for review. These recommendations will feature requirements for the lawsuit to proceed, and will be subject to the approval of the client that we are charged with representing. Typically, the requirements to launch a lawsuit include the payment of court costs, a non-contingent fee for launching the lawsuit, and any out-of-pocket expenses that might be incurred by the attorney while filing and pursuing the case. Additionally, process fees, filing fees, and motions or garnishment fees can be included in this total. These amounts will be refunded when the case is complete.

The non-contingent lawsuit fee charged by most of our attorneys is often up to 5 percent of the debtor’s outstanding balance with the creditor. This amount is credited toward the overall fee of 10 percent charged by the attorney when the case is finished and the funds are collected from the debtor through the use of a judgment and any enforcement methods. It is our job to negotiate with our attorneys in order to ensure the lowest possible fees for our clients. To that end, we typically keep fees very low, especially on cases that total over $10,000 in debt owed the creditor. The non-contingent suit fee is paid to the attorney upon filing the suit itself, and this amount is non-refundable.

Our clients in the United States are required to advance the amount of suit costs to our office before we will authorize our attorney to proceed with legal action against the debtor. This ensures that Collection Agency Service United States does not incur any legal fees for which we cannot be held responsible or reimbursed. It also confirms that our client will be cooperative throughout the entire legal procedure. Suit requirements advanced to us are forward to the attorney on the case, along with documentation proving the validity of the debt.

Filing the Lawsuit

After the attorney has received the suit requirements and the required documentation, a summons and complaint will be prepared and filed with the clerk of the court. All courts do require personal service of these documents on the debtor, and most of these courts further require that such documents be served within 90 to 180 days of being originated by the court itself. If this service is not achieved within the given allotment of time, the court will typically dismiss the lawsuit. Furthermore, if the lawsuit is served outside the Statute of Limitations, the case will be dismissed.

If the debtor is a company and service cannot be performed, the attorney representing the case is permitted to seek leave of the court in order to perform the service himself or herself upon the state’s Secretary of State where the debtor’s business is based. This is not available for individual debtors, however, and does not apply to businesses that are not registered with the Secretary of State.

Proceeding with Litigation and Discovery

After the corporation or individual has been served, they will have a period of time between 20 and 40 days to answer the complaint and return it to the court from where it was issued. This is a wide window of time, but is typically regulated by individual states to be much shorter — often no more than a month.

If the debtor does file an answer to the complaint, the case moves into the discovery phase. This is, by far, the longest part of the legal process when pursuing a debt. This court-mandated period is responsible for researching and proving the debt, and both parties are able to request documents, answers, interrogatories, and requests to admit. Depositions are also allowed during this process, if witnesses are needed to further prove the case. The court can, at its discretion, issue a deadline for the discovery process in order to speed up the trial’s outcome.

Most importantly, the discovery period mandates that each party produce the information that has been requested of them. Failure to do so can result in the court barring all information that has not been produced. It can also result in witnesses being removed from the case if they have not been disclosed to both the court and the other party in the suit. This part of the process is extremely serious and consequential, and it is exceedingly important for both sides to follow state and federal laws during discovery. Failure to do so can seriously compromise the case. Courts can even impose monetary penalties on those who are not timely or forthright in their production of requested documents or witness during the discovery process.

Alternative Dispute Resolution

It’s no secret that America’s courts have a long backlog of cases, and this can make it very difficult to reach a timely outcome of the case. In order to speed up the process, an increasing number of American courts are encouraging the parties involved in a debt collection suit to use the mediation or arbitration processes before a judge can hear a case and proceed to trial. The parties will split the cost of the arbitrator or mediator.

The mediation and arbitration processes are far more informal than traditional trial environments. A third-party arbitrator or mediator will meet with bot parties, or their attorneys, and a few of their witnesses. Both parties will present evidence to the mediator or arbitrator that proves their claim. The mediator or arbitrator then discusses the weaknesses of both sides’ arguments. They will be responsible for making a recommendation about the outcome, as it would occur at trial. If both parties agree, a settlement agreement is drafted by the arbitrator or mediator and submitted to the court.

The recommendation made by the mediator or arbitrator is not binding. Either party can refuse to accept this recommendation and proceed to trial. It should be noted, however, that the party may receive a less favorable result when proceeding to trial; they will then be held accountable for the full balance of the debt as well as any lawyer fees resulting form the trial or from the mediation process.

Obtaining Judgment

Judgments can be obtained through four different methods, each of which typically includes payment of the court costs and any post-judgment interest based on the statutory rate enforced by the court.

If a debtor does not respond to a complaint served to them by the court’s representatives before the mandated deadline has passed, the attorney representing Collection Agency Service United States will file for a motion for default judgment. Depending on how backed up the court’s judges are, this motion can take anywhere from 30 to 180 days to complete. The debtor can vacate a judgment as long as they file the appropriate motion in court. This is typically permitted anywhere from 6 to 12 months after the default judgment has been entered.

Judgments can also be entered if agreed to during a settlement agreement between the creditor and the debtor. This is done through the entry of a consent judgment order. Settlement agreements can also be reached in arbitration and mediation, or during negotiations between attorneys representing both parties. This judgment allows the creditor to request immediate entry of the judgment if the debtor defaults on a prior agreement reached during mediation.

A judgment can also be entered at the end of a trial regarding the payment of the debt. Depending how backed up the court is, obtaining a trial date can take anywhere from six months to five years. This makes such a pursuit very difficult for many creditors.

A summary judgment motion can also be issued, and is considered highly effective. This occurs only in cases where there is no material dispute to the facts of the case as presented by the creditor’s attorneys or representatives. It amounts to a “trial by paper,” rather than appearing in person, but can be hard to complete. Any small dispute of the facts can invalidate the summary judgment process and send the creditor back to square one in terms of collecting and enforcing the debt.

Judgment Execution

After the court has entered a judgment using one of the four methods described earlier, an attorney will record that judgment in the public record. Recording that judgment creates a lien against the debtor’s current property, or any property that they might acquire in the future. This judgment lien will remain valid for between 5 and 25 years, depending on the debtor’s location. Interest does accrue on the judgment from the date it is entered by the court, and this interest is calculated at the state’s statutory rate. Interest will only be charged if the court permits such activity when entering the judgment.

The judgment itself must be served on the debtor through service of process, just like other documents associated with the legal process. At this time, a writ of execution allows the judgment creditor to employ the local sheriff or bailiff to garnish bank accounts or wages, liquidate property or assets, and pursue other methods of execution.

Any costs incurred by the creditor to execute the judgment are the responsibility of the debtor being pursued. These costs can include garnishment fees, keeper fees, bailiff or sheriff fees, and fees associated with seizing and liquidating property to repay the debt.

If the debtor’s assets cannot be located, the attorney hired by Collection Agency Service United States will perform post-judgment discovery to locate those assets. This will include requests to produce financial statements, interrogatories, depositions of principals, and other methods, in order to learn the nature and extent of any assets held by the debtor. If the debtor does not cooperate with this post-judgment discovery process, the court can issue an attachment of the judgment debtor’s principal. The principal will be held in court until sworn testimony is given to the court regarding the debtor’s assets.


Appeals can only be filed in cases where a legal dispute exists as to how the judgment was decided and how the legal process was pursued by the court or the attorneys involved.


Federal law governs bankruptcy procedures in the United States. These laws prohibit collection activities or litigation relating to a debt while the bankruptcy petition is pending. Additionally, many debtors now file “no asset” bankruptcies that involve a sworn statement describing the debtor’s lack of enforceable assets. Creditors cannot file claims during a “no asset” bankruptcy unless a bankruptcy trustee locates assets held by the debtor. If that does happen, creditors will be informed as to the value of those assets and they will be encouraged to file a claim against the debtor. A dividend will be issued within 12 to 24 months after this claim has been filed and accepted.