How to Get Debt Back From Defaulters Effectively

If you want to get debtors that are in default to pay, you must follow sound collection procedures and strategies. When a debtor becomes unemployed, for whatever reason, he may default on a number of debts with creditors. In order to get debt back you must have all the information pertaining to a debtor's situation. This gives you the opportunity to make recommendations for reasonable payment arrangements.

Instructions

1

Call the debtor and find out her situation. As a creditor you need to understand the complete problem. Find out if the debtor is working. Sometimes a debtor will say she is going to make a payment on a certain day just to get you off the phone. This is a method of stalling. You may want to inquire about the debtor's source of income. Income can come from a number of sources, including unemployment, savings, social security, or even interest income. When you know the date the debtor gets paid, then you can pin her down for a specific payment date.

2

Mail a follow-up letter to the debtor to confirm the payment arrangements. This serves as a reminder to the debtor that he made arrangements to pay. When a debtor has received a letter confirming the arrangements, he is more likely to pay on the agreed-upon date. Give the debtor time to make the payment. Put the debtor's account in the follow-up queue.

3

Call the debtor two days prior to the mailing date to confirm the payment arrangements. This serves as an additional reminder call to make sure the debtor remembers to pay. Always be firm when dealing with a past-due debtor, but be fair. When a debtor realizes that you are trying to help him make the best of a bad situation, he will be more willing to work with you.

4

Offer the debtor a settlement. If the debtor is at least 90 days past due, many creditors will offer settlements in the range of 20 to 75 percent of the outstanding balance. Many times debtors will make the sacrifice to pay a debt in full if they can receive a substantial savings on the balance.

5

Start legal action. Sometimes a debtor will agree to pay but continue to break repayment arrangements month after month. This leaves a creditor with no choice but to start legal action. Have the court (either a district court or circuit court, depending on the amount that is owed) send a Writ of Summons to the debtor, which requires that she appear in court. When the creditor is awarded a judgment he can proceed to collect the balance owed by doing a bank levy, which puts a freeze on the debtor's bank account. All the funds or a portion of the funds in the account are turned over to the creditor. A creditor can also garnish the debtor's wages up to 25 percent of the debtor's weekly earnings. This process can vary from state to state.