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Dealing with The Stress of Debt!
As the Christmas period comes to an end and the New Year begins
many people suddenly find themselves faced with the Credit card
bill from hell! It seemed so easy to "spend, spend, spend" when
out buying all the wonderful presents for your loved...
Frugal Lunches: A Debt Reduction Tip
Nearly everyone these days has a little bit of credit card debt, and some more than others. For those of us with multiple credit cards, there has to be a way to pay it down. Surprisingly, small sacrifices can go a long way towards eliminating credit...
How To Avoid The Pitfalls Of Creeping Debt
Reducing debt usually isn't a high priority for people until they have already gotten into trouble with overspending. Using a few basic guidelines, and debt calculations, can help you see when your debt load is getting into the danger zone.
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How to Find a Cheap Debt Consolidation Loan
If you're shopping around for a cheap debt consolidation loan, then you're going to want to try to find the one that has the lowest interest rate that you can get. The interest that you pay will depend largely on the collateral that you can offer...
Stop Debt Collectors Cold and get Back on Your Financial Feet
As a consumer law attorney who counsels people with debt problems, I’ve heard my share of horror stories about debt collectors. For example, a college student client was threatened that she’d be arrested if she did not pay a credit card debt, and...
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Collection Agency Secrets for Collecting on Bad Debt
Getting worried that one of your clients, customers or patients will never pay? Have you given up on a customer who's essentially said he won't pay? Congratulations--being stiffed by a customer or patient is a milestone in the growth of a business or medical practice. But even the most hopeless of bad debts can sometimes be collected-collection agencies have been doing it for years. Here are six of their secrets.
1) Don't Just Call, Write.
According to a leading collection agency, you're much more likely to collect on bad debts when you send a series of collection letters. Deep down, you probably know why collection letters are better. It's the same reasons that would make you uncomfortable placing such a call in the first place: 1) if a debtor knows why you are calling they will avoid your calls; and 2) if you do get them on the phone they will most likely have a bad attitude, or just make excuses like 'the check is in the mail' to get you off their back.
2) Don't Ask If, Ask When.
This leading also recommends that you try to get your debtor to set a date for paying you back. The people who owe you money may have been saying to themselves that they will get around to paying you any day now. But tomorrow never comes, which is why you need a specific date. When you call, start by asking to be paid today, then negotiate from there.
3) Be Mice.
Courtesy is important because: 1) it lets you keep the moral high ground; 2) it makes it likelier that you can establish a cooperative relationship with the debtor for getting the debt repaid; and 3) there are very strong laws against harassment in the collections process and you do not want even to approach their limits.
4) Be Cooperative
Remember: you and your debtor have one thing in common: you both want this debt to go away. In particular, you both want you to stop having to make all these calls and send all these letters. With that shared goal you and your debtor can work together to create a repayment plan. While a repayment plan may not be what you had hoped, it's better than holding onto a bad debt.
5) Know The Value Of Your Time
The one thing that is probably keeping you from collecting on your supposedly bad debt is your fear that the time you spend collecting the debt may not be worth whatever you will recover. This fear is justified; your time is valuable and maybe it would be better spent on
getting new business.
But don't just let this fear linger in the back of your mind, fighting with the little voice that says you want your money. To get a rough idea of how much time you can afford to spend collecting the debt, and whether you have the time to do it at all, sit down and write out a rough estimate of the value of your time, the likelihood of collecting, and the amount you are owed.
For instance, let's say you are going to assign this task to an administrative assistant whose time is worth $15/hour. The debt is $1000. It is owed you by an old customer who is three months behind but has never been seriously delinquent before, so you say you have a 50% chance of getting the money, making the value of the collection about $500.
You divide $500 by $15 and find that your assistant could spend 33 hours collecting the debt before it lost your company money. However, you'd probably still feel a little unsure about whether it was all worth it. Your feelings would be correct: there's still the opportunity cost of all the work your assistant won't be doing to keep your business moving. To be safe, you can also estimate the opportunity cost at another $15/hour, which means you can only really afford to have your assistant spend half as much time, or 16 and a half hours. If you've already spent that much time already, it's time either to call it quits or call in the professionals.
6) Get A Collection Agency
The one secret the collection agencies know about collections is the value their services deliver clients. Unfortunately, businesses do not usually agree to write testimonials for their collection agencies or even recommend them to a friend. If you didn't know that there are small business collection agencies that will collect your bad debt for under $20, you have to admit that leaving your collections to the pros is a pretty good business secret. In short, you don't want your bad debt to cost you twice: once when you lose it, and again when you waste a lot of your or your people's time going after it. Going with a collection agency can help you avoid either outcome.
About the author:
Written by: Steve Austin
Find out more about how to find the best
collection agency for your business at http://www.let-no-debt-remain-outstanding.com
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