Free 10 Day Final Demand
To accommodate those clients that wish to utilize a demand service prior to the placement of a claim with KMK for collection, our firm has authorized the use of, and has provided convenient forms for what is termed a “free demand service.”
It is mandatory that the rules and requirements printed on the forms provided be fully complied with. Your review and adherence to the procedure as set forth on these forms is essential before you use this service.
These basic and specific requirements must be clearly understood and emphasized:
- At the time of submitting the final demand form to the Debtor, a copy of same as designated to go to KMK must be forwarded to KMK the same day as its issuance.
- The demand period as set forth in the form may be any number of days elected, not to exceed 10 days.
- It is understood that KMK will open up a file and proceed with aggressive collection effort on the very next day, after the expiration of the demand period utilized.
- Any monies submitted directly to client utilizing the service within the specified demand period, must be reported to KMK in writing the very same day that the payment is received. Any payments made within the prescribed demand period shall be free of any commissions. Notice of direct payment is a serious issue, requiring immediate notice of same, preferably by fax or e-mail so there is no confusion as to the specific date when the payment was received by the respective client.
- In the event there is a balance owing by the debtor after crediting any payment(s) received within the prescribed demand period, KMK will immediately (upon expiration of the demand period) open up a collection file and aggressively pursue collection for the balance owing with full commissions moving to KMK for all recoveries made thereafter. This will help insure collection of the balance remaining, and avoid harmful delay which is often occasioned after a debtor makes even the most nominal of payments.
It is important for the creditor to realize that any demand period allowed the debtor by the creditor will delay aggressive collection procedure. This can be very costly to the creditor, especially where it is evident that the debtor is experiencing serious financial difficulty, other creditors are pursuing the debtor, and circumstances prevail where it is apparent that any extra demand period may be a serious loss of time.
Caution:
- The creditor’s use of the free demand period is always with risk. If your collection procedures are reasonably timely and aggressive, giving the debtor additional delay may do more harm than good. KMK can confirm, through vast experience, that what is recovered by creditors by use of the free demand procedure is minimal. Utilization of this free demand period can ultimately cost the creditor more than is realized in its use. Delaying aggressive activity against a delinquent debtor often results in an uncollectible account. Collection results are always an issue of “timing, timing, timing”.
- Timely placement of a delinquent account will result in collection. Untimely placement will result in failure of collection of part or all of the account, often even if the delay is a matter of days. A delinquent debtor generally has many creditors chasing collection, and this creates a creditors’ “race” to go against the debtor’s assets. A one-day delay in a creditor’s execution upon debtor’s assets, or garnishment of the debtor’s bank account, may end up in failure because of another creditor’s priority by earlier and more aggressive activity, or because the delay in payment ended up during the preferential payment period of the Bankruptcy Code. What a difference a day makes.
Because of fair debt collection laws, the final demand procedure is only available on commercial claims.
