We think it is possible, however, that the bank was remiss in the handling of this item, and that you received the notice only when it was too late to enable you to prevent the return of the draft. We shall therefore draw again on (date) thru Farmers and Mechanics Bank, unless we receive word from you to the contrary before that date.
Please bear in mind, Mr. that we expect from you either a prompt payment or an explanation of the delay. We are perfectly willing to consider any good reason you may have for not paying this amount promptly, but we ocan not agree to be kept in ignorance of the cause of this delay or of your intentions in the matter.
With renewed assurance of our high regard, and awaiting with confidence your early reply, we are, Yours very truly, Assuming that no reply is received to this letter, the second draft is sent promptly on the date men tioned in the letter.
Should the second attempt meet with no greater success than the first, the futility of that course is thereby fully established, and the need of other—and stronger—means for the collection of the debt are thus plainly indicated. Usually the next step is to send the claim to an attorney for collection.
7. Taking legal ordinary cir cumstances, however, not until repeated efforts have been made to learn from the debtor the real cause of his delinquency should the services of an attorney be sought. If the debtor takes his creditors into his con fidence and explains his circumstances, some satis factory disposition of the matter is nearly always possible. But where this information, despite re peated requests, is withheld, the credit man or the collection manager has no choice. The situation is now becoming grave, and he must do what he can to guard the interests of his house. Tho with the almost certain prospect of losing a customer, he must at this point endeavor, by outside help, to enforce payment.
When this stage is reached, the debtor should be informed that the claim is about to be placed in the hands of an attorney for collection and that if he de sires to prevent this step being taken, he must remit or explain before a certain date, which is fixed, as formerly, just far enough ahead to permit an answer to be received.
If the debtor still remains silent, no further direct dealings with him should be had. From this time on
—at least as far as the debtor knows—the attorney in whose hands the matter is placed is in full charge of the case. The attorney should be urged to do his best to collect the amount of the claim without de lay, or, failing this, to obtain security in the form of a properly indorsed note.
8. A choice of methods.—The attorney who has been intrusted with the claim has now two courses open to him. He may endeavor to effect a settlement amicably, or he may bring suit in court for the amount of the claim and the court fees as well. His course will be governed by conditions as he finds them. Possibly the debtor is so situated that a judgment of court against him can not be executed, in which case it would manifestly be a useless procedure to sue for the purpose of obtaining such judgment.
Or, the debtor's business assets may be sufficient to insure a judgment. Even so, however, the attorney, rather than sue the creditor, will endeavor to induce him to pay the claim tho in case persuasion proves unavailing, the filing of suit is the only alternative.
A frequent mistake on the part of the credit man is to delay sending the claim to the attorney, in the hope that the firm may be able eventually to persuade the debtor to settle his account and thereby save the cost of collection by attorney. This is, as a rule, a mistaken policy, inasmuch as with each day's delay the difficulty of effecting a collection increases. If the debtor fails to respond to the efforts of the credit man, it is safe to conclude that the claim should be placed in the attorney's hands at once. To do otherwise is to jeopardize the collection.
It may happen, however, that a debtor disputes the claim and sets up a counter-claim of rebate for in ferior or defective goods, belated shipment, or the like. In that event, the case may involve litigation. But litigation always increases the cost of the collec tion, and the creditor may be unwilling to incur such costs, especially if he has a fear that despite the just ness of the claim, the case may go against him, owing to the tendency which still obtains in many sections of protecting the local debtor against the foreign (or outside) creditor.