Every business has its share of slow paying and non-paying customers. Bad debts are a problem for businesses of all sizes. If you are considering dealing with non-paying customers, think again. Instead, it may make sense to hire a collection agency. They are experts in debt collection strategies and legal protocol, so you can confidently leave the task to them.
Collection agencies decide the means to collect the debt according to the type of debtor. Some debtors don’t need a lot of persuasion, while others do. For many debtors, just receiving a letter from a collection agency is enough to get the bills paid. However, some tough debtors will do anything to avoid paying off the debt.
Handling difficult debtors requires patience, skill, and perseverance. Difficult debtors can be easily identified by their attitude. They may claim that they do not owe the creditor money and try to cajole themselves out of the situation. If they acknowledge the debt, they will put all the excuses under the sky to convince you of your financial difficulties and your inability to pay.
Here are some tips for handling difficult debtors:
Get in touch with the right person
Make sure you are talking to the right person at the debtor’s company. Do not allow the debtor to refer you to others to be involved in a fruitless merry-go-round.
Be strong
Make it clear that you expect payment for the products or services that the debtor has purchased from you. You have fulfilled your part of the contract by providing the services and goods and you have every right to expect payment for it.
To be professional
Although communicating with difficult debtors can be annoying, as a professional you must remain calm at all times. You must be patient and firm. Adopting a professional and impersonal attitude helps. Do not yell, raise your voice, abuse or threaten the debtor, for any reason.
Be focused
The debtor may try to divert you from the problem at hand by discussing personal stories and making countless excuses. You need to keep tight control of the conversation at all times and return it to the purpose of the meeting: collecting payment or obtaining a commitment for payment.
Ask questions
Question the debtor about the excuses presented for not paying the debt. Asking many questions forces the debtor to find credible answers and, in the grip of stories, the truth can slip away. The debtor generally expects the lies to be accepted without question. Persistent questioning makes debtors uncomfortable as they have to keep making up more lies to back up their excuses. Avoiding a repetition of the interrogation prompts debtors to settle the payment.
Inform the debtor to the credit rating agencies
Sometimes none of the above measurements will show results. This happens when the debtor is exceptionally stubborn. Inform debtors that you are forced to report them to a major credit rating agency. Reporting debtors to credit rating agencies will affect your chances of obtaining credit for up to 7 years. Sometimes the threat works and the debtor can pay. Otherwise, you must follow the warning with action and report the debtor to the credit bureau.
Litigation
Litigation is the last resort. Warn debtors of your intention to sue them. If they ignore the warning and pay, be sure to comply and file a lawsuit. This will make the debtor take collection attempts seriously and reaffirm your credibility.
Collecting debt from difficult debtors is an arduous and unpleasant task. However, it is necessary to do so. It takes patience, concentration, perseverance, and professionalism to handle these debtors. Warnings should always be followed by actions to ensure that the debtor takes collection procedures seriously and pays the debt.
