Project Description
Cold Case Debt Collected
Client: Cement Supplier, AZ
Debtor: Soil Stabilization Contractor, CA
Amount owed: $20,568
Case Study Summary: A cement supplier placed an account with our firm for $20,568 against a soil stabilization company. The amount due wasn’t for the materials, they paid that. It was for sales tax which the debtor claimed should have been paid by the client. Evidently, there was some confusion with the verbiage between the credit application and the invoices.
Despite our best efforts it went uncollected and into the cold case file. We reported it to the two major commercial credit bureaus, as we do all accounts, and for the time being moved on to more pressing issues. This was a disputed account and the debtor had fairly strong contention points and defensible statements.
A few years later, the debtor called the offices of Stevens & Ricci to inquire as to the nature of this item on their credit report. They didn’t know what it was for. Our office staff replied they would have one of our Collection Attorneys review the matter and respond back to them.
The attorney contacted the debtor who requested proof from our client that the sales tax was actually paid. A change of tune: before they wanted the client to absorb the sales tax as a discount and for failure to communicate the sales tax issue.
The matter was resolved with the debtor settling for $16,000 paid in full to clear the item from their company’s credit report. This account was several years old and was settled because it was handled by a professional collection attorney working as a subcontractor of a Broker/Forwarder in the debt collection industry. Our client paid a normal contingency fee – no legal costs or fees. A retraction letter was issued by the Stevens & Ricci collection attorney partner to both credit bureaus to clear the matter as per agreement. Case closed.
Cold Case Collected Thanks to Credit Bureau Reporting Conclusion: Reporting your past-due debtor to the commercial credit bureaus will affect their ability to obtain credit, operating capital, and vendor trade purchases. This can ultimately apply collection pressure also as they realize this negative impact and try to have the item removed by contacting the collection firm that reported them.
