What is pre-legal (amicable) collection?
Pre-legal collection is the default stage for recovering undisputed monetary claims outside of court. When a Client submits a case to Debitura, the platform attempts to match it with an exclusive Collection Partner who operates under the Standard Debt Collection Agreement (SDCA).
A case qualifies for standard pre-legal handling when:
The claim type is an unpaid invoice or loan repayment
The claim is not disputed (or the dispute status is unknown)
The principal amount is at least $100 USD
You can learn more amount pre-legal case criteria here
Under pre-legal terms, the Collection Partner works the case using collaborative methods such as demand letters, phone calls, emails, and payment plan negotiations. The "no cure, no pay" model means the Client pays a success fee only if the debt is recovered.
During the collection period (typically 6 months), the assigned Collection Partner has exclusive rights to work on the case. The Client cannot engage other collection agencies or withdraw without paying the full success fee.
What is legal collection (escalation)?
Legal collection involves escalating a case through attorneys and courts. This stage applies when amicable efforts have failed or the case does not meet pre-legal criteria from the start.
Legal escalation is not governed by the Standard Debt Collection Agreement. Instead, the Client and Collection Partner (or law firm) must agree on separate terms and custom pricing before proceeding.
When cases fall outside pre-legal scope from the start
When an exclusive Collection Partner receives a case that does not fit standard pre-legal requirements, the partner can choose to provide a custom quote with non-standard pricing instead of following SDCA terms.
When and why a case moves from pre-legal to legal
A case typically escalates from pre-legal to legal for these reasons:
Pre-legal efforts exhausted: After the Collection Partner has completed all reasonable amicable collection attempts without payment (demand letters, phone calls, negotiation attempts), escalation may be the next step.
Debtor unresponsive or refuses to pay: If the Debtor does not engage or explicitly declines to settle, legal action may be the only remaining option.
Client requests escalation: The Client can request legal action at any point. This requires the Client's explicit approval since legal proceedings involve additional costs and risks.
Legal escalation is never automatic. The Client must approve legal action before it begins.
What changes operationally
When a case escalates to legal collection:
Different actors may handle the case: The existing Collection Partner may provide legal services, or Debitura may share the case with its network of local attorneys who submit competitive quotes.
Separate agreement required: Legal actions are conducted under a separate agreement between the Client and the Collector (or law firm). Debitura is not a party to these agreements.
Court involvement: The case may proceed through formal legal proceedings, including filing claims, enforcement actions, or litigation.
What changes commercially
The commercial terms differ significantly between pre-legal and legal collection:
Aspect | Pre-legal (amicable) | Legal (escalation) |
Pricing model | Standard SDCA success fee tiers (based on claim size, region, and age) | Custom quote (hourly rate, flat fee, success fee, or hybrid) |
Agreement | Standard Debt Collection Agreement | Separate agreement negotiated per case |
Upfront costs | None (no cure, no pay) | May include court fees, attorney retainers, or flat fees |
How quotes work for legal escalation
When a case needs legal intervention, the quote process works as follows:
If the current Collection Partner can provide legal services: The partner offers a custom quote to the Client with proposed pricing and approach.
If the Collection Partner cannot provide legal services: Debitura shares the case data with its network of local attorneys. Multiple partners may submit competitive quotes.
Client reviews quotes: The Client reviews all submitted quotes, which may include hourly rates, flat fees, success fees, or hybrid pricing models.
Client selects a quote: Upon selection, the winning partner is assigned the case, and legal work can begin under the agreed terms.
For detailed information on how these paths work, see Case flows.
Impact by actor
Client
Pre-legal collection involves predictable success fee pricing with no upfront costs.
Legal escalation requires reviewing custom quotes and may involve upfront payments.
The Client must explicitly approve any legal action before it begins.
Collection Partner
Standard pre-legal cases must follow SDCA terms with fixed pricing tiers.
Non-standard or legal cases allow the partner to propose custom pricing.
Partners may refer legal cases to Debitura's attorney network if they cannot provide legal services themselves.
Debtor
Pre-legal collection involves respectful communication, negotiation, and payment plan options.
Legal escalation may result in court filings, enforcement actions, or formal legal proceedings.
Debitura
For pre-legal collection, Debitura facilitates automatic partner matching and tracks case progress.
For legal escalation, Debitura may distribute the case to its attorney network for competitive quotes.
Debitura is not a party to legal agreements between Clients and Collectors.
What to expect
Most cases that meet pre-legal criteria proceed through amicable collection under standard SDCA terms. The Collection Partner works the case for up to 6 months before determining whether further action is needed.
If escalation becomes necessary, the Client can request quotes for legal action. The Client retains full control over whether to proceed, which quote to accept, and what level of legal involvement to authorize.