Feb
8
When A Personal Contact Fails To Get Payment For An Overdue Bill, What Can The Creditor Do Next?
Filed Under Finance
In the vast majority of situations the first approach that a creditor ought to take when a bill is unsettled after the normal credit period is to get hold of the debtor, by way of a telephone call, personal visit or non-threatening letter. If any of these moves do not make the debtor pay the account then the creditor will have to consider what approach to take next. If the creditor has been in the position of late settlement of bills previously they could have evolved a strategy for dealing with it and so would probably just carry on and take that course of action. If however, this is the first time, or maybe they had been unsuccessful in previous debt collection situations, they would need to investigate their options.
These mainly boil down to three; speak with a solicitor, or a debt collection company and thirdly, look for some debt collection software and carry out the job themselves. There are pros and cons to each option, with the solicitor the creditor is paying for experience, especially if the solicitor specialises in commercial debt collection, when they may be able to get settlement quickly. Their costs may be for the total number of debt collection letters, or maybe a percentage of the debt on collection.
The debt collection company may be harder to choose unless they have local offices, otherwise it means browsing the Internet and then either select based on web site information, or after contact with them. What would not be so easy to uncover is how professional they are when facing a debtor on the creditor’s behalf, since any activity that is unethical may well reflect on the creditor and may give them a bad name with the business community. It is hoped that such bad debt collection companies are in the minority, but if possible the creditor should try and find former customers of the Debt collection company and see what they say. The costs for a debt collection company are possibly calculated as a percentage of the total debt owed and could have expenses in addition to this. Some may offer a no win – no fee deal, but it is unlikely that such a debt collection company would not win, and it depends on what is counted as a win; part settlement, no matter how little may be a win, but it would be probable that the fee would indeed be based on the total debt.
The Debt collection software option would allow the creditor to have full control of the debt collection procedure, edit their own Debt collection letters from instructions in the manual or maybe by using templates that come with the debt collection software. To get the best out of the debt collection software the creditor would need to identify some resource to its operation, maybe make it a part of a current employee’s job. For this in-house approach the important subject is to understand how the debt collection procedure works, what legislation is available to help a creditor and how to edit debt collection letters that are effective in convincing the debtor to pay up. This option has a useful cost benefit in that any solicitor or debt collection company wil charge a fee per debt collection, whereas the debt collection software is a purchased item and can be reused repeatedly with only minimum outlay, such as postage and printer consumables.
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