Show Your Work: Documentation for Collections
We are continuing to talk about the last area of the five areas that make up every business in the world, this fifth area is “collecting.” The other four areas that make up every business in the world are: “Clients” or “customers”; “Administration”; “Getting the work done”; and “Billing.”
We started to talk about the decision to file a lawsuit in order to collect a fee from a client a couple of weeks ago. Last week we talked about what method to use in order to file this lawsuit against the client to collect the fee. My strong recommendation is that you use a third party entity that the bill is assigned to and use that entity as the plaintiff in the lawsuit.
This week we are going to talk about the actual documentation that you use in order to accomplish this assignment and get the petition filed. The first thing you need to have is a recap of your bill indicating the exact amount of money that is owed on the bill for fees and expenses. The following is an example of what this bill would look like:
DATE
THIRD PARTY ENTITY
ADDRESS
CITY, STATE, ZIP
Re: File Name: Our File Number:
Dear _________:
We are referring the above matter to your firm for collection.
As is our standard practice, we have assigned these accounts to “XYZ Corporation, Inc.” for purposes of collection.
We are providing the following information to assist you:
Name: Name of Client whom you are suing
Address: Address of Client whom you are suing
Work: Work Information, if available, of Client whom you are suing
Home: Telephone Number of Client whom you are suing
Unpaid balance due through March 31, 2006:
File Name: File Number: Balance Due:
NAME OF CLIENT CLIENT’S FILE NUMBER $5,000.00
Enclosures:
Billing Files;
Assignments to “XYZ CORPORATION;” and
Affidavits of Records Custodian.
Please let us know if you have any questions. Thanks in advance for your assistance regarding this matter.
Sincerely,
XYZ Corporation
I think you can see from this statement of the account, this document is fairly easily prepared and you can set out the full amount of money that is owed for both fees and expenses.
The next document is the actual Assignment itself. I have utilized the following assignment for many years and I highly recommend it with regard to being able to accomplish the assignment to the third party entity that is going to be the plaintiff in the lawsuit to collect your bill. The Assignment is as follows:
ASSIGNMENT OF ACCOUNT
State of Missouri )
) ss:
County of Jackson )
For value received, the receipt of which is hereby acknowledged, XYZ CORPORATION, hereby sells, assigns, transfers, to ABC123, Inc., a Kansas Corporation authorized to do business in the State of Missouri, its representatives and assigns, for their use or benefit, all right, title, and interest and any and all monies now due, or which may become due on the following listed account:
Account No. Matter Amount Due
$5,000.00
XYZ CORPORATION gives ABC123, Inc. the full power and authority, for its own use and benefit, without cost to XYZ CORPORATION to ask, demand, collect, receive, compound, and give accountancy for the same, or any part thereof, and in the name of ABC123, Inc., or otherwise, to prosecute any suits therefore.
IN WITNESS WHEREOF the XYZ CORPORATION has caused its corporate seal to be hereto affixed and these presents to be signed in its name and behalf by ___________________, its President, this day of , 2006.
XYZ CORPORATION
By:
________________, President
State of Missouri )
) ss:
County of Jackson )
Subscribed and sworn to before me this day of , 2006.
Notary Public
Lastly, we include an Affidavit in our documentation which is supplied by the custodian of records. Our Affidavit states the following:
AFFIDAVIT
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
Before me, the undersigned authority, personally appeared ____________, who, being by me duly sworn, deposed as follows:
1. My name is _______________, I am of sound mind, capable of making this affidavit, and personally acquainted with the facts herein stated:
2. Plaintiff is a corporation duly organized under and existing by virtue of law.
3. Venue is proper in the county stated on Plaintiff’s Petition, and this Court has both personal and subject matter jurisdiction over this case.
4. I am the custodian of the records of ABC123, Inc.
5. Attached hereto are pages of records from Plaintiff’s business office. These pages of records are kept by me in the regular course of business, and it was the regular course of business of Plaintiff for an employee or representative of Plaintiff with knowledge of the act, or event recorded to make the record or to transmit information thereof to be included in such record; and the record was made at or near the time of the act, or event.
6. The records attached hereto are the original or exact duplicates of the original.
7. That the balance due Plaintiff from Defendant______________ after all credits and set-offs is $ through March 31, 2006, and interest continuing to accrue at the rate of 9% per annum from and after March 31, 2006.
8. That the amount due Plaintiff is not subject to further set-off or credit, and that demand has often been made, but Defendant has, without justification or excuse, failed and refused to pay Plaintiff.
____________________
NAME
In witness whereof I have hereunto subscribed to my name and affixed my official seal this day of _________, 2006.
_____________________________
Notary Public
My Commission Expires:
Next week we will continue to talk about the above referenced documentation in detail that you need to file your petition in order to collect your fees.
Talk to you next week!
Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.