COLLECTING PAST DUE ACCOUNTS: Giving a Debtor The Key
By Jim Finucan


When you decide to apply pressure during the collection call – by
bringing up the possibility of taking legal action there are some
points you need to remember.  If your intent is to pressure the
debtor into a corner you should also give him a way out. The key is
getting him to cooperate with you in seeking a consolidation loan,
liquidation or using assets he has on hand.

Unlike a loan, which can be checked on with a call to the financial
institution, which made it, or a glance at the credit report,
liquidation of an asset (the debtor sells something in order to get
the money to pay you) is more difficult to track. Promising to
liquidate an asset is often just another stall tactic.

"I haven't found a buyer yet."

Is the response of a debtor who is trying to put you off.  If he
does own an item that's worth something he should be able to use it
as collateral for a loan and then use the loan to pay you. Let's say
that, in response to your dun the debtor says he will have the
money "in a few months," after he refinances his home loan.

"I have an audit on your account next week. I won't be able to get
through that without recommending legal action. Do you have any
judgments or garnishments against you at this time?"

"No. Hey, you aren't going to do that are you?"

"I don't have a choice. If I don't recommend legal action at that
audit it will look like I'm not doing my job. Unless, of course, you
can swing that loan this week so we can clear this balance. Then we
can skip the audit. What do you think?"

Put the problem in the debtor's lap. His situation isn't hopeless;
he isn't powerless.  If he wants to stop any further action he can
choose to do so. Handling the problem this way also takes you out of
the position of being the bad guy.

If the debtor files a Chapter Seven (bankruptcy) you would receive
notification from the debtor's attorney or the U.S. Bankruptcy
Court. If bankruptcy has been filed look for the district in which
it was filed, the date and the bankruptcy file number. If you file a
claim with the bankruptcy court you may eventually receive at least
a portion of what you are owed.

Incidentally, I do not recommend that you encourage a debtor to use
a pawnshop to raise money from personal valuables. Taking this
course can sometimes create legal problems.

(End)


Jim Finucan knows all about the dances, dodges and delays debtors
will try to pull. Let Jim show you how to double or even triple the
money you collect from your accounts receivable. Check out his
unique collections manual "Past Due." For more information visit:
http://www.tiare.com/pastdue.htm