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Why Juristec? Juristec provides both technology and services that allow clients to cost effectively litigate on a high volume of low-balance and late-stage bad debts while maintaining control of the case.

Juristec enables its clients to: – Capture revenue that has been written off to bad debt by the client. – Focus on collecting a higher volume of small-balance and late-stage debt. – Collect 20-30% of qualified delinquent debt through litigation. – Increase the ease and professionalism of their debt collection process. – Maintain oversight of the collection process. Allows client to have adequate communication with customers and prevents over-zealous collection practices. – Track and document each case and efforts for collection. 1


Effectiveness of Debt Collection “There is a unique power in utilizing the court; however, it’s certainly fair and effective to use a court to collect a debt which has not been paid after years of debt collection efforts in many cases.” - Adam Olshan, Past President of the National Association of Retail Collection Attorneys A) Most traditional collection attorneys are not able to handle large volumes nor low-balance debt. Because high-balance debt is often difficult for debtors to manage financially, attorneys face less actual collections and more bankruptcies.

C A B

20%

Collection Volume

25% B) Average collection for industry players is approximately 15% (ACA, 2005). C) Only with Juristec can clients/attorneys utilize the effectiveness of litigation with the high volume practice of collection agencies.

20%

10%

15%

Current Attorneys

*Based on five-year average of Peterson & Simpson’s debt collection practice. Cases received by Peterson & Simpson are late-stage (8-14 month) and low-balance ($1,000 average).

2

Collection Industry

With Juristec*


Comparisons Collection Agency

Traditional Law Firm

Client Using Juristec

Collection Capabilities

Calls, Demand Letters (non legal), Credit Checks

Demand Letters, Litigation, Garnishment, Bench Warrants

Demand Letters, Litigation, Garnishment, Bench Warrants

Regulations

Tightly regulated by FDCPA

Partially regulated by FDCPA but has many more options through litigation

Partially regulated by FDCPA but has many more options through litigation

Under FDCPA, collectors can no longer contact if debtor requests no contact. Does not take legal action.

Bankruptcy

Bankruptcy

50%

33-50%

25-40%*

Early: 60-180 days

Any

Any (Typically late-stage: 180+ days)

10,000-25,000 per year

200-500 per year

10,000-25,000 per year

1,000

5,000

1,000

10-15%

20-30%

20-30%

Obstacles

Contingency Fees

Collection Stage

Case Load Average Case Size % Collected

3

*By increasing volume of cases to a law practice and providing the means to process them, client can better negotiate legal fees with attorney.


Juristec Target

Bad Debt Balance

Juristec enables clients to target: 1. Late-stage/secondary placement debt collection agencies have failed to collect. 2. High-volume of accounts that have not been serviced by an attorney. 3. Small balance debt that is more affordable for Debtors to pay.

High $50,000

Traditional Law Firms

Collection Agency Target

$5,000

Juristec Target

$500 Low 3 mo

6 mo

1 Year

Age of Debt 4

2 Years


Advantage in Debt Collection Over Traditional Law Firms Clients using Juristec are fundamentally better at collecting on bad debt because clients can collect on “affordable” debt.

High-balance debtors have a greater likelihood of filing for bankruptcy and defaulting on their debt. Law firms typically settle for what they can get.

Bad Debt Balance

High $50,000

Written Off (“The Can’ts”)

$5,000

Juristec pushes the cost of each case down making it possible to pursue low-balance debtors that traditional law firms can not pursue

Traditional Law Firms

Clients Using Juristec “The Won’ts”

$500

Low-balance debtors have a greater capacity to pay off their debt and can make manageable installment payment rather than defaulting.

Low Low

5

Ability To Pay

High


Advantage in Debt Collection Over Traditional Collection Firms Current solutions for collecting late-stage debt are inadequate. Juristec significantly improves the effectiveness of collecting older debts. 35%** C

20%

A)

Industry average for collections is 14% (ACA international).

B)

The probability of collecting late stage debt is 72-87% less than collecting at early stage.

C)

With Juristec Clients/Attorneys utilize the effectiveness of litigation with the high volumes of collection agencies.

A

10%

B

25%

14% 4% Collection Industry Total Early Stage/Primary

Collection Late-Stage/Secondary Placement Industry Collection Through Late-Stage/ Juristec* Secondary Placement

*Based on five-year average of Peterson & Simpson’s debt collection law practice. Cases received by Peterson & Simpson are latestage (8-14 months) and low-balance ($1,000-$1,250 average) and are focused mainly in Health Care. **Average reaches 35% when excluding skips.

6


In-House vs. 3rd-Party Collectors “We really put a large emphasis on customer service from cradle to grave, because we’re with these customers for many years.” - Kathleen M. Pierce, Managing Counsel – Business Centers for Ford Motor Credit Company LLC “My perception [is] that the third-party collectors, there's a little more aggressiveness there. There’s a little less, corporate responsibility… If you’re dealing with a company like Ford Motor Credit, you are going to go up the line to a point and reach someone really in a position of corporate responsibility that’s going to call off a dog or what have you.” - Cary L. Flitter, Lundy Flitter, Beldecos & Berger, P.C. “We like using you [a legal firm] instead of a collection agency because I can control how it is handled.” - Carol Werner, Workers Compensation Fund

7


Complaints to the FTC The FTC continues to receive more complaints about third-party debt collectors than about any other single industry. The number of these complaints has been increasing steadily for a number of years, reaching nearly 70,000 in 2006, and as we look at our complaints that are coming in so far for 2007, it looks like they’re coming in now at an even greater rate. Complaints about this industry have also increased as a percentage of the number of complaints that the FTC receives as well. - Deborah Platt Majoras, Chairman, Federal Trade Commission 80 70

Complaints to the FTC, In Thousands

60

3rd-Party

50

In-House

40 30 20 10

Nilson Report (835, 857, 880)

8

20 06

20 05

20 04

20 03

20 02

20 01

20 00

19 99

0


Juristec Results – Case Study Juristec ASP is a proven technology that has been used to collect over $75 million in late-stage collections. Peterson & Simpson was a small, but very effective legal practice with two attorneys, one paralegal, a few administrative assistants and part-time file clerks.

Total Remittances: $300 Million

The firm received 500 new cases per week with an average case size around $1,000, with $500 as the minimum. Cases were received between 8 and 14 months past due after several collection attempts had been made. Each case was prosecuted to judgment and a debtor's exam unless paid or settled. Cases that warranted it were garnished. The office staff created a series of pleadings and letters with minimal input and without resorting to word processing, which provided a complete audit trail of pleadings and transactions. The firm allowed debtors to make installment payments; the program calculated a per diem interest rate. The firm was able to move forward on those who defaulted in payments without any loss of efficiency. The platform allowed the firm to maintain a high level of professionalism in their practice, enforcing the office standard forms, eliminating human error, and automatically calculating interest, costs, attorney fees and balances. Judges appreciated the firm’s pleadings because of this efficiency. The client received monthly reports including payments, costs, and important status changes. Development of the first electronic filing system with the Sandy Court in Utah increased ease of filing cases. The firm collected 2030% of outstanding debt per year, double the average of traditional agencies.

9

Collected: Collected: $75 Million $75 Million

Collections for Peterson & Simpson, Attorneys at Law


Why is Juristec a good choice