Another Actual Case

On September 12th, I contacted a business owner who's company had been recently sued. After explaining my offer to negotiate an out-of-court discounted settlement on a no results / no charge basis, he agreed to let me try. I quickly faxed him a contract.

This case involved a worker compensation insurance company suing for past premiums that were due. Since I deal with the attorney for this company on a regular basis, I knew going in what to expect in the way of a settlement. However, I always start my negotiations with them low just in case they're not paying attention. You never know!

The principal amount of the debt was almost $19,000 (plus court costs, attorney's fees and back interest on the debt) so I initially offered $8,500 as a lump-sum payment. I also indicated any higher amount would require at least a two year payment term. They rejected this offer and countered at $15,000 payable with a down payment of $1,000 followed by 24 monthly payments of about $633 each. There would be an 8% interest rate applied to the outstanding balance and the settlement would be secured by an Agreed Judgment (please see previous blog entry of July 4th). My client would also have to pay the court costs of $272 but no attorney's fees (these could have amounted to over $6,300 or 1/3 the principal). This counter offer was comparable to other settlements I had worked with this same creditor and I knew it was their best deal... approximately a 20% discount with some standard provisions.

I presented these terms to my client on September 25th and they accepted on the 29th. As usual, the plaintiff's (creditor's) attorney is preparing all the documents and sending them to me. I will forward them to my client upon receipt of my fee. For this case my fee was set at 30% of the savings and came to over $1,100. The entire process only took a little over 2 weeks and involved a couple of phone calls and one settlement offer letter but ALL parties benefited.

As I have previously stated, the negotiation process need not be complicated or difficult. A simple offer to get the ball rolling is all it takes once you land a client.

Scott F. Soape