Part 10: What Does This All Costs?
The creditors’ rights lawyers will generally agree to a contingent collection fee (often paid by the agency). In addition to the contingent fee negotiated by the agency, attorney’s suit fees are for the work in preparing and prosecuting the lawsuit. Sometimes there is an agreement that the suit fee will be contingent on recovery. Sometimes part of the suit fee is paid to the lawyer as a non-contingent partial advance, to help compensate for the work done in connection with the lawsuit. On occasion, the lawyer may want the creditor to advance other fees in extraordinary circumstances (if extensive discovery takes place, if there are many Motion hearings, if there is an extended trial).
A check for the amount of the court costs and any suit fees advanced should be payable to the attorney and sent to the agency for forwarding to the attorney. Some agencies charge an additional suit or administrative fee when suit is authorized. The amount of any fee should be clearly understood before suit is authorized.
Court costs are always recoverable from the debtor as part of a judgment. Attorney’s fees are generally not recoverable unless a matter of agreement between the creditor and the debtor, or authorized by a specific statute.
It should be noted that many companies have agreements with their customers (either in specific contracts or in enforceable terms and conditions) that would support the collection of attorney’s fees and collection expense. If such provisions exist, this information should be made available to the agency when the claim is placed. Even if the fees are later waived, it will give the agency and the attorneys greater leverage in demands and settlement discussions.