Due to the fact companies are folding and filing bankruptcy for various reasons the use of a personal guarantee will become more common and the need to be on top of your accounts will become more advantageous regardless if you are dealing with a small, medium, or large company.
Debtors cannot go to a bank and request a loan with out attaching a personal guarantee to it. Neither you nor I can go to a bank and request a loan without a personal guarantee and all sorts of strings attached, so why should you float someone that could be using your money interest free? You're not a bank.
Reaching out to a commercial collections firm that specializes in the construction industry and that is licensed in all 50 states minimizes your risk on throwing good money after bad. The fact of the matter is a good firm will work strictly on a contingent basis and fees are negotiable based on the size of the account, how old the account is, and how many accounts you have. A good firm will also provide you with resources and free consultation to help minimize your risk moving forward and provide all the tools as listed above to help you do your due diligence before execution of contracts and the credit granting process.
This way, should money get collected, fees are paid out of the transaction upon cleared funds and not out of your pocket, therefore minimizing your exposure versus paying a handsome retainer to an attorney who has nothing to lose. Also, should the standard collection efforts fail; a good firm will do their due diligence to determine if the account is "suit worthy." This is done in most cases by licensed and bonded private investigators utilized to do onsite visits and who will also have access to privileged information to determine if there are bank accounts for garnishment, if there are assets to go after, or if the debtor is truly having troubled times but is sincere and wants to show a good faith effort or if it is simply an unwillingness to pay.
After review, should an account be deemed "suit worthy" then a good collection firm will have an established network of specific specialized collection attorneys who also work on a contingent basis. The only out-of-pocket exposure you would have in this case is any state-required court costs and filing fees. This process will minimize your risk of, in some cases, throwing good money after bad.
Al Dias is an active vice president of consultation for Allied Collection Resources. He is available to consult with readers of Pavement Maintenance & Reconstruction and he can be reached at 817-570-9155 or via e-mail at email@example.com.