Related Information Examples & Tutorials

How To Post Court Or Legal Costs

This topic covers assigning court or legal costs to a Debtor or Client.

Requirements

- Experience using and setting up Transaction Types

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Overview

Court and other costs can be assigned to a Debtor or to a Client. This can be done by posting transactions to the Debtor's account.

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Legal Cost Transaction Types

First, it is necessary to create Transaction Types to handle your legal fees. For this, please use the 200 series in the Transaction Type categories, since types 200 to 299 are set aside for Legal Costs.

For example:

Code 205 - Serve Papers - Account Type: Fee

Code 210 - Docket Cost - Account Type: Fee

tip.gif Any legal cost that is posted as a transaction in the 200 series is automatically tallied by Collect!

When you click in the Principal field on the Debtor form, you can view the Total Legal Costs in the Financial Detail form. Select the Totals tab.

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Posting A Legal Transaction

After you have created your transaction types, you can use them to assign fees to debtors or clients.

To try this out, go to the Debtor form and select the TRANSACTIONS tab. Create a new Transaction of type 205, assuming you created a 205 transaction type.

ADD FEE TO DEBTOR

To add the fee to the Debtor, enter it as a negative (minus) amount in the 'To Us' field. This will add the amount to the Debtor's Owing.

BILL FEE TO CLIENT

To pre-bill the Client this fee and NOT add it to the Debtor, enter the cost as a positive amount in the ' Commission Amount' field. When you generate the statement, Collect! will bill the amount to the Client and not affect the Debtor's Owing.

ADVANCED BILLING TECHNIQUES

The procedures described so far are very straightforward. However, scenarios of fees, charges and billing can be complicated and diverse. The following is an example of a slightly more complex assignment of costs. It will demonstrate the flexibility of Collect! for posting different types of transactions and payments.

Let's say that you want to charge legal fees to a Debtor. Since you have paid the costs yourself, you don't want to wait to be reimbursed. You want to bill your Client now and reimburse them when the Debtor settles the debt.

1. To add the amount to the Debtor's Owing, post a transaction of a legal type as described above. Enter the amount in the 'To Us' field as a negative (minus) amount. This will increase the total that the Debtor owes.

2. In the Client Payment form, enter a new client payment that is a negative (minus) amount, equal to the amount entered in the Debtor form.

In the Description field, enter a note to explain that this charge is "Billing for court costs for Debtor #, etc."

When the Client's statement is generated, the amount will be calculated and billed. A note will be included to explain the charge.

3. When the Debtor settles the debt, post a transaction that is a Payment type. In the Description, enter "Payment toward court costs".

4. In the Client Payment form, enter a new client payment that is a positive amount.

In the Description field, enter a note to explain that this is "Credit for court costs for Debtor #, etc."

When the Client's statement is generated, the amount will be calculated and credited. A note will be included to explain the reimbursement.

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Legal Fees Breakdown

In the Financial Detail form, Total Legal Costs amount is displayed. If this is a combination of fees that are owing to the agency and fees for which the client must be reimbursed, you can do a breakdown of Legal Fees.

tip.gif When you setup your transaction types for court costs and payments, be sure to refer to help documentation. In particular, the 'Omit from Client Statement' switch can be used to flag charges that do not involve the client.

If a breakdown of legal fees is needed:

1. When you are on the Debtor's form, select the TRANSACTIONS tab to display all transactions for this Debtor.

2. Press F6 to bring up the Edit Search Criteria form. To refer to help available for designing search criteria, press F1.

3. Do a search for all legal fee transactions that DO NOT have the 'Omit from Client Statement' switch set. This will tell you the portion of fees that were charged to the client. Descriptions that were entered when the transactions were posted can give you details. Also, the Client Payments can be checked to confirm your calculations.

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See Also

- How To Setup Transaction Types
- How To Post A Transaction
- Legal Topics

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