Being indebted, regardless of how much is owed, can indeed be a difficult and frustrating experience. Not known to most debtors, these are the same sentiments that creditors feel when they don’t get paid back. Creditors also desire to wipe out all loans as much as borrowers do, but only when they get back what is rightly owed them, or at least, as much of that as possible.
One worst-case scenario that you can face in debt collection is the debtor filing for bankruptcy, as this could leave you with nothing while the other goes away debt-free. Then again, you would also not want to lose a valuable customer or client just because he or she missed one deadline. It’s important to determine the type of action to take for each case, and to always remember that both sides–you and the person who owes you–aim to be rid of any financial obligations.
As a creditor, bear in mind that you can conduct asset investigations on persons or entities who owe you money to determine whether they have the means to pay, and if you need legal intervention to collect payment. Settling a debt in court doesn’t happen often, though, and could be avoided through negotiations. Here are some pointers on how to approach negotiations with a debtor.
Negotiate From the Start
The goal in any negotiation is to have results that are favorable to you, and this is something you need to keep in mind every time you interact with customers who can’t pay back on time. Though starting with a cordial relationship is advisable, always see each interaction as a negotiation. During the initial discussions, clarify all concerns regarding the collection terms and state your expectations as thoroughly as possible.
Every once in a while, the borrower could actually forget a particular payment or details of the payment. The common mistake of many collectors is resorting to a hostile demand tactic without knowing the reason for the non-payment. To avoid becoming the “bad guy” on a simple payment scheme, send gentle reminders that the person owes you money for products or services delivered and ask for the reason why payment has not been made.
During negotiations, knowing as much information as possible about the debtor’s financial standings will certainly put you in an advantageous position. Get the help of a seasoned asset investigator, like one from Phenix Investigations, Inc., to have all the details you will need in coming up with a settlement.