A Step By Step Guide On How To Effectively Recover Your Debts
Lending people money and expecting them to return it by the due time is a reasonable assumption that many people make, especially entrepreneurs and business people. However, not everyone is honourable and trustworthy with many people and businesses failing to pay their debts at the due date. For small businesses, this can be especially difficult s they often offer credit in to their customers, clients and business associates in a bid to sustain sales and business profits. Doing this should be done with extreme caution by running credit checks and having sound terms of trade if a business does not want to go through the trauma of a debt recovery process. Here is a step by step guide on how to effectively recover debts.
Recovery of debts can be easily conducted with minimal effort if the right planning and preparation is done. When appropriate measures are employed during issuing of loans, occurrences of late payments and rogue debtors become very rare. Being able to effectively recover all your debts from people within a certain duration of time ensures that you are able to maintain your financial stability and your business enterprise does not suffer in any way.
Everything starts with effective communication. This is where you are able to communicate well and as often as possible with all the people who owe you money. Talking is good and it ensures that business and personal relationships are not jeopardised just because of money. Once you are aware of the need to communicate well with your debtors then coming up with a solid debt collection schedule is the next step
It is crucial that you familiarise yourself with the different types of debtors which can fall into three broad categories:
– People who want to pay but are not in a position to do so because of their current financial situation.
– People who always make delays or are late to make payments.
– People who do everything they can to avoid paying their debts.
Categorising them in this way helps a person to know where there is hope of getting their money back and where this is no hope at all. In the case where there is almost zero hope of recovering a debt, legal action can be taken into consideration in order to get back what belongs to you.
The approach taken to recovering debts is basically what determines the effectiveness of the debt recovery process. Again, communication is key and can result in someone getting back all their money from debtors.
There are some few tips that you can use to improve the success rate of recovering your debts. These tips can greatly help you to carry out an effective debt recovery or collection activity within a very short duration of time.
Do Not Harass Your Debtors
This is very important as it can be the difference between getting your money back and getting nothing at all. Being polite when requesting payment of debts from people is a good approach to recovering debts. Debtors will feel more obliged to pay up if they are treated in a more civilised and understanding way.
For a business that is recovering debts from customers and clients, asking for payments in a polite and simple way is the way to go in order for the business to retain its loyal customers and clients.
Be Specific and Direct To The Point
This is somehow self-explanatory but very important to put into consideration. When executing a debt recovery or collection plan, it is very important that you keep your communication brief and all messages requesting payment should be short and concise.
Seek The Services Of A Reputable Debt Collection Agency
If things get too tough for you or your business, then looking for some professional help is not really a bad idea. Debt recovery and collection procedures are not all that easy to execute and they can lead to a lot of time being wasted by individuals and businesses as they chase after debtors. To save on a lot of time and money that can be wasted during debts recovery, you should hire a good debt recovery agency to do the job for you.
The Legal Option For Debt Recovery – A Lawyer
A debt collection agency can be quite expensive as they typically take fees of 20% or even more from the money they recover. An alternative and often faster option is to consult an Auckland debt recovery lawyer. The lawyer will write to your debtor asking for payment. Often merely having a lawyer on the case will prompt payment or at least the offer of a repayment schedule. This can save you a considerable amount of time and cost. However, if the debtor is till slow to pay, then your lawyer can start more stringent legal proceedings by taking them to court.