Debt Collection Techniques - Giving a Debtor the Low-down

by Jim Finucan

Published on this site: May 18th, 2005 - See more articles from this month...

Just as a debtor has an obligation to pay his debt to you, you also have an obligation to him. You need to make the debtor aware of the possible consequences of letting a bill get to the point where it has been or might be turned over to a collection agency. Those consequences include having a black mark placed on their credit report. That could affect the debtor's credit report for the next seven years. Not only do loan companies look with disfavor on people with bad credit ratings, anyone checking the credit of a job applicant would not be feeling positive about hiring that person. Don't forget to mention this job aspect to the debtor, especially if you're dealing with a college student.

Other fallout of letting a debt get out of hand is the chance that legal action could be taken and a judgment issued and then used to garnish the debtor's wages or his bank account. Note that you should not bring this possibility up with the debtor unless your office reserves the right to take legal action.

Never say anything to the debtor that you do not mean. If the debtor says:

"Don't call me at work anymore." (Remember this is a "cease.")

"Why not"

"Cruz I could lose my job!"

"Are you listening to me Harold? What are they going to say if garnishment papers arrive with your name on them?"

Stay cool but include a touch of concern. Once you have informed the debtor of what could happen you can talk about solutions. You can become the "answer person" who is able to help the debtor out of his financial troubles.

Let 15-year collections pro Jim Finucan show you how to double – even triple - the amount of money you collect from your accounts receivable. Check out his unique collections manual "Past Due" shows you how to handle all their excuses. For more information visit: http://www.tiare.com/pastdue.htm