83 lines
2.9 KiB
Markdown
83 lines
2.9 KiB
Markdown
# Debt Recovery Experts (DRE) — Fee Structure
|
||
## Proposed for review with Tony — July 2026
|
||
|
||
---
|
||
|
||
### Philosophy
|
||
Fee is based on effort required. Early resolution costs less, so clients pay less. Litigation requires attorney involvement, so the fee is higher. This incentivizes clients to provide good documentation upfront and rewards early recovery.
|
||
|
||
---
|
||
|
||
### Standard Fee Schedule
|
||
|
||
#### Tier 1 — Soft Touch (Automated email + payment link)
|
||
| Claim Amount | DRE Fee | Client Receives |
|
||
|---|---|---|
|
||
| $1,000 – $5,000 | 25% min $250 | 75% |
|
||
| $5,000 – $15,000 | 22% | 78% |
|
||
| $15,000+ | 20% | 80% |
|
||
|
||
*Includes: email demand, payment link (Stripe ACH), 14-day response window*
|
||
|
||
#### Tier 2 — Formal Demand (Certified mail)
|
||
| Claim Amount | DRE Fee | Client Receives |
|
||
|---|---|---|
|
||
| Any | 30% | 70% |
|
||
|
||
*Includes: Tier 1 + certified letter via LetterStream, 15-day demand notice, proof of delivery*
|
||
|
||
#### Tier 3 — Escalation (Final notice + intensive contact)
|
||
| Claim Amount | DRE Fee | Client Receives |
|
||
|---|---|---|
|
||
| Any | 33% | 67% |
|
||
|
||
*Includes: Tier 1-2 + final demand letter, additional communication attempts, enhanced skip tracing / debtor research*
|
||
|
||
#### Tier 4 — Legal Action (Referral to partner law firm)
|
||
| Component | DRE Fee | Law Firm Fee | Client Receives |
|
||
|---|---|---|---|
|
||
| Total fee | 10% referral | 25% litigation | 65% |
|
||
|
||
*DRE handles: case file prep, document transfer, client communication*
|
||
*Law firm handles: filing, court appearances, judgment enforcement*
|
||
|
||
---
|
||
|
||
### Example — $15,000 Claim
|
||
|
||
| Scenario | DRE Fee | Client Gets | Timeline |
|
||
|---|---|---|---|
|
||
| Paid at Tier 1 (email) | $3,300 (22%) | $11,700 | 2-14 days |
|
||
| Paid at Tier 2 (certified mail) | $4,500 (30%) | $10,500 | 15-30 days |
|
||
| Paid at Tier 3 (final notice) | $4,950 (33%) | $10,050 | 30-60 days |
|
||
| Resolved at Tier 4 (litigation) | $1,500 (10%) + $3,750 (25% law firm) | **$9,750** | 60-180 days |
|
||
|
||
---
|
||
|
||
### Out-of-Pocket Costs (passed to debtor or deducted at settlement)
|
||
|
||
| Cost | Amount | When |
|
||
|---|---|---|
|
||
| Online notarization (LPOA) | ~$25-35 | Per claim |
|
||
| Identity verification | ~$4 | Per signer |
|
||
| Certified mail (debtor) | ~$8.34 | Per letter |
|
||
| Court filing fees (if litigated) | ~$250-400 | Tier 4 only |
|
||
|
||
*Costs are either collected from the debtor as part of the recovery or deducted from the client's proceeds. DRE does not absorb these.*
|
||
|
||
---
|
||
|
||
### Recommendation
|
||
- **Start at 30% standard rate** for most claims (Tier 2)
|
||
- **Offer 20-25% for high-dollar claims** ($15K+) or repeat clients
|
||
- **Tier 4 referral model** (10% to DRE, 25% to firm) keeps it attractive for both DRE and the partner firm
|
||
- **Disclose all fees in LPOA** — Texas Finance Code requires clear disclosure
|
||
|
||
---
|
||
|
||
*Questions for discussion with Tony:*
|
||
- Flat 30% across all tiers vs tiered rates?
|
||
- Minimum fee floor ($250)?
|
||
- Volume discounts for repeat clients?
|
||
- Payment processing fees passed to debtor?
|