How to Deal with a Debtor?

Debtor Excuse, Collection Agency, ARM Industry, Collection Agent, Call Center


      Collections agencies have a difficult job. It is not easy to convince people to make monthly payments on their past-due debt. It is even harder to persuade debtors to pay off their past-due debt in full. Debtors are typically embarrassed, frustrated, or in complete denial about their situation. This often leads to a tense situation during collections calls. A typical debtor excuse contains reasons as to why they cannot pay. Once in a great while, the debtor is honest in their explanation.

      However, the majority of the time, the debtor is merely attempting to delay the process. They may be under the false impression that the past due debt will magically disappear if they wait long enough. However, the collections agent must put his or her best foot forward in an attempt to collect the past-due debt for their clients. It always helps to have a full toolbox at their disposal.

      How to Deal with a Debtor?

      If someone owes you money, you may be wondering how to deal with a debtor. The first step is to send a demand letter. This is a formal notice that requests the person to pay you the money they owe. If they do not respond or pay within a certain period of time, you may take them to court.

      Here are the top 3 ways to deal with debtor excuses :

      Debtor Excuse#1: The Check Is In The Mail

      The check is in the mail is the oldest excuse in the book. People have been using it since the paper check was invented. Frequently, debtors will claim that they already sent out the payment, and it should arrive any day. This is rarely a true statement. It is typically an excuse that is used to buy time. Once again, debtors are famous for attempting to delay the collections process. At this point, it is difficult to prove that the debtor is lying. Even if the debtor offers to provide a copy of the check, it does not prove that it was mailed.

      The best way to overcome this excuse is to offer the debtor a better payment option. If the payment option is more comfortable for the debtor, they will have difficulty coming up with an excuse. The solution is to allow the debtors to pay with credit and debit cards and give them the option to pay online. Payment Savvy specializes in collection agency credit card processing services. Apply for your collection agency merchant account today.

      Debtor Excuse #2: The Debtor Has Cash Flow Issues

      Debtors will excuse that they cannot afford to pay off the debt or even make a monthly payment due to cash flow issues. They may even provide an excuse as to why they are having cash flow issues. For example, the debtor has suffered from an illness, injury, or a death in the family. Business may be slow, or they lost their job. While all of these excuses may be valid reasons why they have incurred past-due debt, the debtor is still ultimately responsible. The balance or monthly payments must be collected. Although the debtor may be reluctant to write a check, they could very well be more agreeable to pay with a credit card. The collections agency must have a credit card processing system in place—partner with Payment Savvy for the best payment solutions in the industry.

      Debtor Excuse #3: The Past Due Debt Is In Dispute

      Often the debtor will dispute the direct debt owed. This can be based on the premise that the product or service was unsatisfactory. If this occurs, the agent should ask the debtor to explain the situation in detail. Some disputes may be valid, but most are not. The agent can offer to settle the debt with the creditor. If the debt cannot be resolved with the creditor, the debtor will remain responsible for the past due debt. At this point, the agent should offer the debtor the option to pay with a credit or debit card.

      How do I convince a debtor to pay?

      If you are unable to convince a debtor to pay, you may need to take legal action. This could involve hiring a debt collector or taking the debtor to court.

      What you must do when confronted by an angry debtor?

      1. Remain calm and try to rationalize with the debtor
      2. Try to come to an agreement on repayment
      3. If all else fails, contact law enforcement

      We specialize in providing collections agencies

      Payment Savvy specializes in providing collections agencies with the ability to accept credit card payments. This is accomplished through the use of a collection agency merchant account.  Please contact Payment Savvy today to review all options, obtain answers to your questions, and apply for a merchants collection agency account. Payment Savvy is only successful if we can help your business grow through the use of our products and services.

      We look forward to hearing from you and partnering with your business.

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      Tracy Sullivan

      Tracy Sullivan

      As our resident “numbers guy”, Tracy is responsible for Payment Savvy’s financial planning, analysis and projections. With 20 years of accounting experience under his belt with various CPA and high technology firms, we look to him to ensure our fiscal future stays in the black. He is a highly regarded member of our team and we appreciate his hands-on approach and diligent attention to detail.  With Tracy we are able to apply innovative, practical and outcome driven financial strategies to take Payment Savvy to the next level.