Debt collection has always been an ongoing challenge for businesses, no matter what type of business they operate. Hundreds of debtors have difficulty getting money together to pay their outstanding balances, but others just don’t care and hope you’ll give up. It can be hard to differentiate between the two, but debt is debt and everyone has a responsibility to repay it. Here are three of the best ways to recuperate some of your income.
Treat with Respect and Be Courteous
Debtors fear bill collectors, especially with the nasty tricks that can be used, as well as the threatening communications. This is a risky method of collecting, as well as illegal under certain circumstances. The bottom line is that collectors don’t want to push the debtor further away by making them angry or making them have a lack of respect for the company.
Respectfulness and courteousness includes:
Listening to the debtor,not just going in one ear and out the other to say what you want to say
Respecting the debtor
Being openly available to two-way conversations, not just one
Never threaten or demand the debt balance
Payment Strategies or Plans
Demanding a full balance up front will usually end in refusal or silence by the debtor. Most debtors cannot afford an upfront payment for the full balance that is due. At that point, they just throw in the towel and say forget it because they cannot come up with a practical plan of action. This leads to added, costly expenses in attempting to collect the balance when it may not be necessary in the first place, depending on the situation.
Payment plans and strategies include:
Offering payment plans that you feel the debtor can afford
Opening an invitation to work with them on a payment plan
Offering a discounted balance if they can afford to make one or two payment
Listen to their requests and try to establish a satisfactory payment program that works for both parties
Debtors know the legalities of unpaid debt and most are willing to solve the problem if they can find a way. Nobody likes court, garnishment, or asset seizures so most wish they could solve the problem in some way.
Controlling the Communication of Debt
Harassment is usually not part of a collector’s policy, but it does happen. Aside from that though, a collector should limit their amount of phone calls, even if it is not defined as harassment. Calling as little as two times a day is enough to push a debtor further away. Calling every day also has the same effect. Once a week is suffice, but biweekly is better. Overly calling the debtor ends in having more expenses and more time consumption with attempting to collect the debt. Sending letters is not as bad, but one a week can also push a debtor away.
Lastly, email is risky way to collect and it often makes it more difficult in court actions. In addition, visiting the debtor’s residence is considered a forceful method of collecting debt in their eyes. This also pushes them away or makes them give up, leading to more expenses to collect the balance owed.