| If your business has receivables, at some point | | | | HELOC, for example, may contact you and try to |
| you're going to need to know how to collect debt. | | | | make good on their debt in exchange for you |
| There are a few well known principles on how to | | | | responding to the credit bureau that the debt was |
| collect debt that will help you make the process | | | | satisfied. |
| go quicker and painlessly. | | | | This can happen right away or it can happen |
| The first step in collecting debt is to start with | | | | years down the road. Report to the credit bureau |
| gentle reminder letters and phone calls. If you're | | | | as soon as you're sure that the debtor is not |
| talking to a good client from whom to hope to | | | | going to pay up. This is an important step in how |
| get business in the future, a simple "I believe you | | | | to collect debt even if it doesn't help until a year |
| may have overlooked this invoice" is a good start. | | | | or two down the road. |
| If the debt has been outstanding for a while, you | | | | Another possibility is offering the debtor a |
| may need to step up your language a bit. "Upon | | | | settlement. This can be done on your own or |
| receipt of this letter, please remit payment | | | | through an arbitrator. If, for example, someone |
| immediately or further action will be taken." | | | | owes $5,000 on your store credit card, but the |
| But maybe you can't find the debtor in order to | | | | original debt was $3,000 and the rest is late fees |
| call them or send them a letter. If their last | | | | and raised interest rates from after they stopped |
| known phone number or address isn't getting you | | | | paying, it may be a win-win situation for both of |
| in touch with them, try a private investigation firm | | | | you to offer to take $3,000 and drop all further |
| or online investigation software. For less than $30 | | | | claims. |
| you can find the address and phone number of | | | | A payment plan is also a possibility. Whether you |
| anyone in the United States, and often finding the | | | | offer skipped payments, interest only payments, |
| debtor that's been hiding will scare them enough | | | | or a lengthened loan term, it saves the debtor |
| to get them to pay. You can also hire a collection | | | | cash outlay during a financial crisis and benefits |
| agency that makes use of private investigators if | | | | you over time because you make more money |
| you don't have the inclination to track someone | | | | on interest. |
| down yourself. | | | | The final thing you need to know when you're |
| When you've found the best phone number and | | | | considering how to collect debt is the law of |
| address for the difficult debtor, the next thing | | | | diminishing returns. The amount of money you will |
| you should do is to tell them that you're reporting | | | | recover on the dollar drops at 90 days, 180 days |
| them to credit bureaus. Of course, you have to | | | | and one year. Concentrate your best efforts |
| be willing to actually do this, but there are benefits | | | | during the window of opportunity and you'll get |
| to both the threat and the action. People who | | | | more money back. Professional collection agencies |
| care about maintaining good credit scores may | | | | with expertise in the area of how to collect debt |
| pay when they hear the threat, but reporting to | | | | advise that immediately after 60 days is the best |
| the credit bureaus will help you down the line as | | | | time to get your money back. |
| well. The homeowner who wants to get a | | | | |