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Debt Collecting Q & A
– Issue 5
By Jim Finucan
© Tiare Publications Group
DEBT COLLECTING Q & A - #5
Jim: My question is simple. I don't like to mess around so I
just
hand my delinquent accounts over to an attorney who sues the
client
right away. I either get a judgment or they pay just before
the court
date. Why doesn't everyone do it this way?
Barry (OH)
Barry –
Your approach is effective and often becomes the last resort
after
several attempts have been made to reconcile a delinquent
debt. But
it's important to decide how long you want to allow a
delinquent debt
to remain on the books before you turn it over to a lawyer.
Do you
treat each situation the same? i.e. do you wait the same
number of
days? Do you send the same number of notices no matter what
the
situation? Do you send the debtor a warning letter letting
him know
this will go to an attorney if not paid by such and such a
date? Is
your attorney a collection specialist who is taking steps to
collect
the bill before
moving forward with a court date?
I recommend adopting a specific procedure before you turn
your
attorney loose on the debtor. One size doesn't necessarily
fit all.
There are times that require understanding the debtor's
problem;
situations that might work themselves out if you waited just
a little
longer. At worst a few phone calls would let the client know
you are
genuinely concerned about their success and are interested
in helping
them. This understanding approach cements a relationship and
can
result in years of customer loyalty.
But don't get me wrong. Sometimes you need to put the
squeeze on.
However, clients need to be listened to so hear them out
first. Your
company should have a collections policy that is both
specific and
flexible or you are likely lose clients to someone who does
make an
effort to understand and accommodate special debt
situations.
Before you turn things over to an attorney give the customer
an
agreed upon deadline by which you need a certain amount to
be paid,
otherwise you'll have to get your attorney involved. Let
them know
the situation can't be left up in the air for too long. This
approach
increases your chances of having a repeat customer – one
who may even refer others to you. A little understanding and
compassion can go a long way towards helping your business
succeed.
(End)
Jim Finucan is a 12-year collections veteran and author of
"Past Due –
A Debt Collections Manual." More information about this
powerful
debt collecting tool can be found at: http://www.tiare.com/pastdue.htm
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