Creditors’ Rights: 5 Tips on How to Collect Debts

If you’re in the type of business that extends credit to customers, then you’re officially in the business of collecting debts. Unfortunately, collecting debts can oftentimes be difficult, time-consuming, and fruitless–not to mention a drain on your financial resources. However, by following these tips on how to collect debts , you may be able to make the process easier and a lot less painful. 1. Be reasonably persistent and polite. Though you may want to yell at a debtor and talk to them on a daily basis, neither of these is a very good idea. Maintaining a professional demeanor will keep you out of threat territory, and calling a debtor no more than once every few days will allay any concerns of illegal harassment. 2. Put an end to excuses. It’s your job to answer every excuse with an alternative option. If a debtor says the check is ready to be mailed, offer to pick it up. If they say they need to get to the bank, offer to take them. 3. Use credit scores as leverage. As a creditor, one of your biggest assets is the ability to put a black mark on a debtor’s credit report. As leverage, warn that you will respond to an unpaid debt with a report to the big credit agencies. This may get a debtor moving. 4. Hire a debt collection agency. If you simply don’t have the time or personality to collect debts, consider outsourcing the workload. However, research and find a reputable agency , as they are governed by specific laws and violations may hurt you in the end. 5. Go to small claims court. Though this may not be the easiest way to collect debts, it still allows you to handle a claim yourself. Simply go down to the courthouse, file paperwork, and serve the debtor. When it comes time to go to court, bring evidence and show the judge. Related Resources: Extending Credit & Debt Collection (FindLaw) Credit and Collections: Two Approaches (FindLaw) Debt Collection Agency Uses Facebook to Contact Debtor, Gets Sued (FindLaw’s Common Law)

Read more here:
Creditors’ Rights: 5 Tips on How to Collect Debts

Twitter Follow

Follow us on

Contact Us

ATTORNEY ADVERTISEMENT:  This communication or portions thereof may be considered "advertising" as defined by Section 6157(c) of the California Business and Professions Code or within the jurisdiction in which you are viewing this.  Nothing in the discussion above is intended to be a representation or guarantee about the outcome of any legal proceeding in which you may be involved.  By providing the information above in this format, Michel & Associates is not soliciting you to hire it to handle a specific legal matter you may currently have or be anticipating commencing in the future.  Notwithstanding the discussion above, you should not act or refrain from acting on the basis of any content on this site without seeking appropriate legal advice regarding your particular circumstances from an attorney licensed to practice law.  This communication is informational only and does not create an attorney-client relationship between you and Michel & Associates.  Michel & Associates's attorneys are licensed to practice in California, Texas, and the District of Columbia.