By Rilind Elezaj
Offering goods or services to a client and the client refusing to pay for them is not an unheard of situation in any particular business setting. There’s always a client or two who refuse to pay their debt. What this translates into is that every business owner should at least know the basics of debt collection, what the process entails and what needs to be done in that situation. Failure to do so may lead to legal troubles. To help you avoid those kinds of situations, here are five surefire ways to collect debt.
1. Understand Your Rights As the Debt Collector
If you happen not to have any professional background in debt collection, then the chances of you getting sued or landing on the wrong side of the law are very high. Your best option is to first understand your rights as the debt collector and those of the debtor. If you do that, then you will not only be confident in whatever you will be doing, but also avoid getting sued or infringing on the debtor’s rights. Understanding both your and your debtor’s rights is a sure way to avoid infringing on anyone’s rights.
2. Keep Calm
If someone owes you money for goods or services rendered and they refuse to pay you, you obviously cannot help but get upset. It’s only human. However, it is of vital importance that you remain calm and avoid acting emotionally. Someone owing you money should not be an excuse for you to act rudely or violently towards them. If you are angry and shout at the debtor, chances of you collecting the debt will be very slim. Getting angry and exchanging harsh words with the debtor will make them not want to cooperate with you at all. It will make you sound unprofessional. If you want to convince the debtor to pay their debt, relax, collect your thoughts and present them in a sober and professional manner.
3. Know that Documentation Is Everything
Imagine having to go to court to prove that your debtor has refused to pay your debt. You will obviously be required to have substantial evidence that the debtor indeed owes you and that they have refused to pay you. That’s where proper documentation comes in. It is a vital element in helping you win your battle in court and thereafter recover your money.
You should, therefore, take notes during every phone conversation with the debtor, keep a certified copy of every letter you send out to the debtor and save every email correspondence. You can also log all the visits you make to the debtor’s home or office. This information will be very helpful in helping you recover your debt.
4. Hire a Collection Agency
If you have been making numerous attempts to collect debts with no success, it might be time for you to just hire a collection agency to do it for you. A collection agency is a better option since they have professionals whose sole purpose is to collect debt. You may have many other things to get done but a collection agency has one role — to collect that debt for you. With their knowledge, experience, and resources, the chances of you collecting your debt are very high. They also know the tricks of the trade, something that you as an individual or business might not have. You will end up saving yourself a lot of precious time at very little cost.
5. Do Not Harass Your Debtors
Harassing the people who owe you money is pointless. In fact, you may end up getting sued. Yes, be persistent, but do not harass. Yes, make calls or visits to your debtors, but do not call or visit every day or even several times a day. If a debtor feels harassed, they will not pay you back. The harassment will make them avoid you even more. They won’t pick your calls or allow you anywhere near them. This means they will not pay you. To avoid this, know the difference between persistence and harassment, and avoid the latter.
Debt collection is not for the faint-hearted, you have to be firm and gentle at the same time in order to achieve results. If you equip yourself with these five important tips for debt collection, the process won’t be a walk in the park, but it won’t be as hard either.