Whether you are a creditor’s representative or you’re handling your own business’ debt collection, there’s always a chance of facing a delinquent payer. This is the type of payer that is refusing to pay even after multiple notices and is showing no intention of paying their debt. As a creditor, how can you handle this type of person in a way that won’t hurt your business further?
Before resorting to debt collection or service of a subpoena, here are some strategies you can try:
1. Be consistent with reminders
When a payer starts to slack off with their payments, send them notices right away. Whether you are a landlord or a business owner, it’s crucial to be firm about payment schedules regardless of the type of client you’re dealing with. This way, they will know outright that you don’t and won’t tolerate late payments.
Send them payment reminders consistently, but not to the point of blowing up their inbox or mailbox. After the first notice, people who intend to pay you will likely respond. For those that don’t, you may have to resort to stricter measures.
2. Offer alternatives
Sometimes, there are valid reasons clients are unable to pay right away, such as loss of employment or unexpected medical bills. For cases like these, you can offer your debtor alternative payment options that would enable you to get your money while making it more possible for your client to pay. For example, if you have rendered a service that costs a significant amount of money, offer instalment payments instead of a one-time payment. You may not get the whole sum right away, but it will make it easier for your client to pay.
3. Meet them in person
Your physical presence is definitely harder to ignore than a late payment notice. That said, if the payer is within a reasonable distance, consider visiting them at their office to remind them of their debt.
4. Send a final invoice or debt collection letter
After multiple notices and your client has not even responded with an explanation of their late payment, it’s time for the next step. Send them a final invoice or a debt collection letter, whichever is more applicable. In this notice, state clearly when you want the payment to be made (for example, “due upon receipt” or “due ten days after receipt”) and your intent to take legal action if they still refuse to pay. Most debtors will make settle their payment after this notice if they want to avoid going to court.
5. Hire a debt collection process service
A debt collection process service is responsible for serving debt collection notices and/or court summons to delinquent payers. Needless to say, this can make debt collection much easier for you. Moreover, if you are unable to reach or locate your payer, skip tracing services are available to find them.
Collecting payment from a delinquent payer is a big headache, especially if you have many other things to deal with. If you are having trouble with a nightmare debtor, use these strategies to get your money while avoiding court proceedings as much as possible.