How to Collect On Past Due Accounts

The unstable state of the economy is wreaking havoc across the nation. Homes, businesses, even banks are feeling the crunch from heavy financial pressures and shrinking profit margins. As a result, one only need look in the paper to see, many families and businesses are forced into corners of high debt, with ten to hundreds of collectors vying for the money they lent out. So, how do you become the collector they pay?

Instructions

1

Analyze the number of people you have to collect on, comparing them with the number of days you have to do it. Most companies, especially if you are collecting your own receivables, give you the month to collect on your customers, before they turn into an account 30, 60, or 90 days delinquent. Or worse, a charge-off.

2

Make a plan to contact these customers a certain amount of times during the month. Research and experience shows you need to contact them at least weekly. As you get down to the end of the month, for many, that may turn into an every other day, or daily thing.

3

Be genuine. You don't have to be their friend, but you should be aware and empathetic of their circumstances. Let them know you understand times are tough. Share with them your own tough times. They need to feel you are understanding of their needs. Know their kids, jobs and hobbies. The more you know the more you will see them as people and vise versa.

4

Let them know that you also have needs. And one of those, in order to support your family, is to collect the money that people owe the company. They need to see this is not personal. They will pay the people they feel care, not the guy who doesn't pronounce their name right and has no clue who they are; rather just wants their money, despite any personal setback resulting in their incurred debt.

5

Be cordial on the phone, not threatening. The key is to be bold, but not overbearing. In all things, they have to feel you are doing this for their benefit. Make sure you take time to ask about school and work, etc. while on the phone. Don't keep it to just "Give me your money now or I'll sue!"

6

Be creative. Calling to collect money, though cost-effective, is perhaps one of the most ineffective methods of actually collecting. Try any of the following:

7

Sending an email. Many people have access to email more often that phone. A quick email is a non-pressured way to initiate dialogue. On a phone it is hard to tell if they listened to your message and just aren't calling back. But with email you can set your outgoing correspondence so you are notified when they open it.

8

Send a letter. Not a standard formulaic, pre-drafted collection letter, but a personalized letter with a personal note from you. This is another way, when coupled with messages on the phone, that can let them know you are there to help and they are more than just a number.

9

Make a house call. While this tends to rub people the wrong way at first, it is an extremely effective method. And after a while, they will get used to it being your method. Many companies call this "chasing" and will alot a certain amount to cover gas. If not, the government does alot 45 cents. Keep strict driving records and plan ahead to piggy-back your visits.

10

Give them minimum amounts, letting them know, I know times are tough, but I'll be upfront with you. This, x amount, is what I need this month to buy us until next month to get caught up.

11

Explore other options with them, giving them ideas of where to get the money; family, friends, selling on eBay, craigslist, etc; or items to give up: cable, cell phone, netflix, beer, etc.

12

Play "good cop, bad cop" as needed; meaning sometimes one collector has to become a "scape goat" for lack of empathy and understanding, so you can become the one who does understand and will help them through it all--to the end.

13

Explain how interest works and late fees work. Many people do not understand these key things that often lead to greater debt. Sometimes a simple explanation will help them prioritize where their money goes.

14

Write them a thank you or pull them aside and say it when you get their payment. Together come up with a plan for the next month and a date to talk again so you can get back on track--together!