A Collections Law Firm Built for A/R Departments

If you manage accounts receivable for a Texas business, you already know what your aging report looks like. A handful of accounts have crossed 60 days. A few are past 90. One or two have gone silent. You have sent the statements and made the calls, and you may have already run an account through a collection agency that got you nowhere.

So the question on your desk is a plain one: when do we stop running this through internal A/R and hand it to an attorney who can actually collect?

We are a Texas collections law firm built for exactly that decision. We have handled commercial collections here since 1994, and today we have 15 lawyers who work the whole collection life cycle: pre-suit demand, judgment, post-judgment discovery, garnishment, turnover orders, and contempt. Every matter on our docket is a collections matter. Collections is what we do, not a sideline.

This page is for the A/R manager, the controller, the credit manager, or the CFO trying to sort out which accounts belong with counsel and which can stay in internal collections a little longer.

What A/R Departments Hire Us to Do

Our work for A/R departments falls into four categories.

Reduce overdue invoices to judgment. For trade creditors, this is the core service. We file suit on past-due invoices, usually as a Suit on Sworn Account under the Texas Rules of Civil Procedure, and move the matter to judgment as fast as the rules allow. We have run a great many of these suits, and our system is built to keep the cost per matter below what a general practice firm would charge for the same work.

Collect on judgments we have obtained. Once a judgment enters, we go after it: written discovery and depositions to locate assets, abstracts of judgment to attach real property, writs of garnishment against bank accounts and receivables, writs of execution against non-exempt personal property, turnover orders, receivership, and contempt when the situation calls for it. A judgment by itself is not money. The enforcement work is what produces recovery.

Take over judgments obtained by other counsel. Plenty of A/R departments come to us with a judgment already in hand, won by their corporate counsel, by another firm, or by a predecessor lawyer who does not do post-judgment work. We take those files over regularly and run full enforcement on them.

Pursue personal guarantors. Commercial accounts are often guaranteed personally by the business owner. When the business defaults, the guarantor is on the hook. We pursue guarantors as a matter of course, and we know how to beat the defenses guarantors tend to raise: lack of consideration, modification without consent, release, and fraud-in-the-inducement.

When Should an A/R Department Escalate to Outside Counsel?

Usually earlier than most departments do. Delay is the single biggest thing that costs you recovery. Every month an account sits, the debtor has more room to spend down cash, shift money to a new bank, or reorganize the business under a different name, and the limitations period on the claim keeps shrinking.

What we have learned handling commercial accounts gives us a list of practical escalation triggers you can use to justify the handoff to leadership.

Escalate when:

• The debtor has stopped responding to statements or calls for 30 days or more
• The debtor has disputed the invoice in writing but cannot articulate a coherent basis for the dispute
• The debtor has sent a check that was returned for insufficient funds
• The debtor has changed banks, addresses, or business form (e.g., dissolved an LLC and reopened under a new name)
• The debtor has stopped paying multiple vendors in your industry, a sign of broader distress
• The debtor’s principal has personal financial trouble that has become visible (tax liens, lawsuits, divorce filings)
• A payment plan was agreed to and the debtor missed the first or second installment
• The account is approaching one year past invoice date with no meaningful payment

Any one of these is a reasonable trigger. Two or more is a clear signal. If you are not sure, we can evaluate a matter quickly; that conversation is part of how we take in new files.

Collection Agency vs. Collections Law Firm: Where the Line Is

A/R departments routinely try a collection agency first. That is sensible for some accounts and a mistake for others. Both have a role.

A collection agency can send letters, make calls, and report a debt to a credit bureau. An agency works on contingency, usually 25% to 50% of recovery, and that fee comes out of whatever it collects voluntarily from the debtor. What it cannot do is sue, take post-judgment discovery, garnish a bank account, or obtain a turnover order. If the debtor decides to ignore the agency, the agency is out of tools.

A collections law firm can do everything the agency can and everything it cannot. We file suit, take the matter to judgment, and run post-judgment enforcement, which means writs of garnishment, writs of execution, turnover orders, receivership, and contempt proceedings. Where the debtor has assets and refuses to pay voluntarily, the law firm is the only path to recovery.

So the line is roughly this: an agency may be the right call for very small balances where litigation would cost more than you would recover, or for early-stage accounts where the debtor is responsive but slow. Once the debtor stops cooperating, the balance justifies legal action, or there is value in showing your future debtors you will take this all the way, the law firm is the right tool.

How to Preserve a Debt for Legal Collection Before You Send It to Counsel

What your A/R department does before a file reaches us has a real effect on what we can do once it arrives. The do/don’t list below comes out of thousands of commercial collection matters.

Do:

• Keep signed credit applications on file for every commercial customer
• Get personal guaranties from the business owner whenever you extend meaningful credit
• Document every communication with the debtor (date, time, who participated, what was said)
• Preserve email chains and text messages relating to the account
• Keep proof of delivery and acceptance for every invoice
• Get any payment plan in writing, signed by the debtor, with explicit acknowledgment of the full balance
• Confirm the debtor’s full legal name and entity form before extending credit
• Capture invoice acceptance in writing where possible

Don’t:

• Don’t accept partial payments without a written agreement that addresses the remaining balance and preserves your right to pursue it
• Don’t agree to extensions without putting them in writing
• Don’t make verbal threats of legal action you have not committed to take
• Don’t keep extending credit to an account that has stopped paying
• Don’t let the account age past one year without an internal escalation decision
• Don’t negotiate directly with the debtor in ways that could be characterized as a settlement of the disputed amount
• Don’t destroy or discard original documents, including envelopes, returned mail, or signed delivery tickets

When a file reaches us with this groundwork in place, we can go from intake to demand letter in days, and from demand letter to filed petition typically within 30 days, often within 10. Files that arrive without it can still be pursued, but the path is longer and the cost is higher.

What to Expect When You Turn a File Over to Us

A/R managers answer to leadership and want to know the workflow before they hand off a file. Ours is straightforward.

Intake and evaluation. When a new matter comes in, one of our lawyers reviews the file and talks it through with the A/R manager or designated client contact. We ask about the history of the account, the defenses we should expect, what the client knows about the debtor’s assets and operations, and what outcome the client is after. That conversation happens before we do any work on the file.

Demand phase. In most matters we open with a demand letter. The letter satisfies the requirements of Texas Civil Practice & Remedies Code Chapter 38 for the recovery of attorney’s fees on certain claims, and it gives the debtor a last chance to resolve the matter without suit. Roughly 15% to 20% of debtors start resolving at this stage.

Filing. When demand does not produce a resolution, we file suit. For invoice and account-stated matters, we file a Suit on Sworn Account, which shifts a meaningful procedural burden onto the debtor. The petition typically goes on file within 30 days of the demand letter, often within 10.

Judgment. We pursue judgment by default when the debtor does not answer, by summary judgment when the answer fails to raise a genuine fact issue, and by trial when the matter has to be tried. Our collections practice handles all three regularly.

Post-judgment enforcement. Once judgment is obtained, we conduct post-judgment discovery, file writs and abstracts, pursue turnover and receivership where it fits, and take contempt action against debtors who refuse to comply.

Client communication throughout. We send updates as material events occur. Your role is to give us the information we ask for, sign off on the significant strategic calls, and weigh the cost and benefit of continued enforcement at the points where that question actually matters.

Ready to Move a File Forward

A/R managers face the same recurring decision: which accounts stay internal, and which move to outside counsel. The longer that decision is put off, the harder collection becomes.

If your A/R department is sitting on accounts that have gone quiet, that have hit your internal escalation threshold, or that simply warrant a closer look from a collections lawyer, get in touch. One conversation is usually enough to tell whether, and how, to move forward.

Contact us to get started or call 214-368-4686.

Related Pages

• Our Debt Collection System
• Collecting Judgments in Texas
• Promissory Note and Guaranty Enforcement
• Year-End Write-Off Decision
• Getting Started
• Texas Collections Law FAQs