Texas County May Drop Collection Agency for Law Firm

Nacogdoches County Texas is mulling over changing its collection firm, shifting its business from a powerful agency with national contracts to a smaller law firm.

Nacogdoches County has used Austin-based Municipal Services Bureau, to collect fees and fines more than 60 days overdue since 2001. MSB was able to help the county recoup more than $1.3 million in the first three years of actual collections. MSB is a division of Gila Corporation, a large provider of revenue recovery solutions for local governments and financial institutions nationwide.

However on Monday, Precinct 3 Commissioner Charlie Simmons made a move to convince the board to consider moving its business to McCreary, Veselka, Bragg and Allen P.C., a Round Rock, Texas-based law firm with 12 attorneys and approximately 20 locations throughout the state of Texas.

“We can get a better rate going with a new firm,” Simmons told insideARM.com.

The Nacogdoches Daily Sentinel reported Tuesday that Steve Wiggum of McCreary, Veselka testified to the commission that the firm would take a 15-percent cut from the actual money owed for any unpaid fines and fees that occurred before June 18, 2003.

Officers of MSB appeared surprised by the possibility of losing the contract.

“We actually had just made a presentation to the Commissioners’ Court, at their request, back in April,” Med Fadel, chief operating office of MSB, told insideARM.com. “They told us at that meeting that we were doing a great job for the county.”

Fadel declined to discuss contract terms.

The proposed change isn’t a done deal. The Commissioners’ Court has asked for more information, and County Judge Joe English told the Sentinel, “I just want to make sure that whatever we do is in the best interest of the county, and that we’re not switching companies just to be switching companies.”

Both collections law firms and collection agencies seek debt from consumers late on payments; however, law firms have the added authority to sue debtors, something collection agencies cannot. Some creditors see this as an added benefit.