If you are in a business that deals with lending money to people then you are automatically involved in debt collection. Many people believe that
collection of debt is an easy process but the reality is that it is often a tedious and tiring job. Bad debt is a growing problem that is affecting businesses of all sizes and every company has its own share of non paying customers. If you are finding it very difficult to deal with such customers, here are some tips that would speed up your debt collection.
Collection Of Debt
Know about the debtor : The first important thing that you need to do is learn about the debtor. Have a clear knowledge about his account details and credit record. This would help you a lot when you call and talk to that person.
Maintain Professional attitude : Maintaining professional attitude when dealing with debtors is very important. Never raise your voice or yell at the debtor even if you are frustrated with his attitude. Debt collection laws have become very strict these days and you may face legal proceedings for illegal harassment. Always maintain a calm composure.
Writing is Better than Calling : Majority of the customers are scared of receiving collection letters and more likely pay off their debts after receiving a series of them. Debtors can easily avoid your calls but not your letters. Also calling the debtor for more number of times might land you in legal troubles for illegal harassment.
Stay Focused : Debtors always try to divert your attention by giving innumerable excuses. Always stay focused and control the conversation. Put an end to their excuses by offering a solution. If they say that they need to withdraw the money from the bank offer to take them to the bank. Collection of debt is your primary target and do not let the conversation deviate from it. keep the call brief and to the point.
Be Cooperative : Understand the customer’s problems and his financial situations. He also wants to pay off this debt and avoid these uncomfortable conversations with you. This can only be achieved with your co operation. Formulate a reasonable payment plan that suits the debtor. This would help the debtor to pay off his debt and also helps you to maintain a good relation with the customer.
Report Debtor Name : Some of the debtors have really bad attitude and are very stubborn. Dealing with such people is very difficult. In such situations threaten the debtor that you would report his name to the credit rating agencies. This would scare even the toughest of debtors as reporting to credit agencies affects tampers their chances of getting credit for as long as 7 years. If they still do not budge to your threatens then go ahead and report his name to the credit bureau.
Hire a Collection Agency : The best solution for all your debt collection problems is hiring a collection agency to do the job. They are professional experts in debt collection strategies and are well versed with the legal protocol, so you can leave the task to them and relax. Handling difficult debtors requires a lot of patience and skill and collection agencies exactly knows how to deal with them. There are many collection agencies that collects your bad debts for reasonable costs. It is always a good idea to leave the job to the pros.
File Lawsuit : This should be the last step from your side. If the debtor is very stubborn and if your collection agency also fails to collect the debt, then it is for the court to decide the dispute. Warn your customer and then file the lawsuit. But it is always advisable not to bring things till this level.
Collection Of Debt
Collection of debt is a very tiring job and is often frustrating. However it needs to be done.Always follow your warnings with actions so that the debtor takes the collection process seriously and pays off the debt on time.