Do you have debtors who just don’t seem to want to pay you what they owe? If so, you’re not alone. One study estimated the total of unpaid invoices equated to about 5 percent of the US GDP. (About $825 billion!)
Many businesses struggle with getting debtors to pay up. In this blog post, we will discuss some of the behavioral trends of debtors and how you can use that information to recover the money owed to you. By understanding why debtors behave the way they do, you can put together a plan that is more likely to get them to pay what they owe. So, let’s get started!
1. Debtors may procrastinate or ignore calls and emails from you in an effort to avoid paying what they owe.
If you’re a small business, you’re probably no stranger to having debtors avoid your calls and emails. It’s a common tactic that debtors use in an effort to avoid paying what they owe.
There are a few different reasons why debtors might do this. For one thing, they may be hoping that if they ignore you long enough, you’ll eventually give up and stop trying to collect the debt. Or, they may be trying to come up with a plan to pay off the debt, and they don’t want to be pressured into making a payment before they’re ready.
Whatever the reason, it’s important to remember that you have rights when it comes to collecting a debt. You can’t be harassed or intimidated, and you can’t be misled about what you can do to collect the debt.
If a debtor is avoiding your calls and emails, there are a few things you can do. First, try sending them a certified letter. This will let them know that you’re serious about collecting the debt. It also will give them a specific date by which they need to respond.
If they still don’t respond, you can consider taking legal action. But before you do anything, make sure you understand your rights and theirs. You want to protect your best interests, but to do so, you’ll need to ensure you’re not violating the Fair Debt Collection Practices Act (FDCPA) practices. A debt recovery service can help with this.
2. They may also try to negotiate a lower payment than what is actually owed.
Most Americans have some form of debt, whether it’s a mortgage, a car loan, student loans, or credit card debt. In many cases, they may attempt to negotiate with creditors to lower your payments or even waive fees. If they’re having trouble making monthly payments, they may attempt to call and ask for a lower interest or an extended period of time for which to repay.
It’s up to you to decide whether this is ultimately worth your time and energy. As a business owner, you’re entitled to be paid in full for the services and products you provided. But debtors have options at their disposal like bankruptcy to try and escape debt. Sometimes it might be worth it to be flexible to keep this from happening to your business.
3. Some debtors may feel overwhelmed or embarrassed about their financial situation and be reluctant to communicate with you.
Some debtors may feel overwhelmed or embarrassed about their financial situation and be reluctant to communicate with you. It is very important to be empathetic and understand that they are going through a tough time. However, you need to emphasize that communication is key to finding a solution.
Explain that you are here to help them, not judge. Reassure them that you will work with them to find a way out of their debt. Be patient and understanding, but firm in your resolve.
4. Others may be disorganized and have trouble keeping track of their finances, which can make it difficult to pay you on time.
Debtors may be disorganized and have trouble keeping track of their finances, which can make it difficult to pay you on time. This is especially true if they have multiple debts from different creditors.
They may lose track of who they owe and how much they owe, which can make it difficult to make timely payments. In addition, some debtors may be overwhelmed by their debt and feel like they will never be able to get out from under it.
This can lead to despondency and even depression, which can further interfere with their ability to stay organized and keep track of their finances. If you are a creditor, be aware of these potential difficulties so that you can work with the debtor to create a payment plan that is realistic and achievable.
If you’re having trouble getting a debtor to pay what they owe, understanding these behavioral trends can help you develop a plan to get the money you’re owed. It also helps to have a professional pursuing debt recovery for you. Southwest Recovery Services has been doing just that for many years, and we can put our expertise to use for your business. Contact us now to learn more.