Your Action Plan for Difficult Debtors

In debt recovery, there are two things that can make the difference between success and a complete write-off. The first is having a strategy. The second is persistence. Not giving up at the first sign of resistance, or the second, or the third. Determination combined with strategic enforcement techniques can be your best chance of success. But what does that strategy look like, and how can you best implement it?

Act With Urgency

The most important part of your action plan is when you start, which should be as soon as the invoice ticks into ‘overdue’. The longer a debtor can avoid enforcement, the harder recovering the debt becomes. So your check-ins should start the day after an invoice is due and payment hasn’t been made. Friendly yet professional messages, at first, and if there’s no response (or a series of excuses), then it’s time to bring in the big guns. Don’t wait and ‘hope for the best’ for months before you start professional enforcement action, contact an agency as soon as possible for help.

Provide all Known Addresses

Many debtors will move between multiple properties. Sometimes those moves are completely innocent, but sometimes they’re a calculated way to avoid being chased for their debts. Whether individuals move or whole companies, we’ve seen it all happen! So, when you’re bringing in an external debt collector, don’t just share the most recent address you have for the debtor – give them every address you have, even old ones.

Share Vehicle Information

If you have any information about vehicles associated with the debtor, this can provide powerful leverage for you. Regardless of whether you’re chasing the debt yourself or bringing in help. A Debtor’s vehicle may be levied for enforcement of a CCJ, if they own it. So even if you only have a record of a sales rep signing into your carpark as a guest, this is important information.

Consider Using Trace Services

If you’re finding a debtor to be particularly elusive, then debtor tracing services can be particularly helpful. Professional tracing services work by essentially compiling all of the data you provide, and then cross-checking it through various databases. There’s also a lot of digital research and verification that goes on, like checking open-source intelligence providers, search engines and even social media to find links to new locations, activities, current employer information, and even in some cases new identities. All of which mean you, or the agency can reliably get in touch with the debtor.

Be Prepared for Partial Settlements

Sometimes you can’t get the whole debt repaid. The debtor might not have the money, not be able to pay all at once in full, or even be in liquidation and you’re one of many creditors in the line. Being prepared to offer or accept a substantial partial payment with ongoing instalments is usually the most practical path to recovery.

Document all Interactions

Make sure you keep detailed records of all of your communications with the debtor. Collate everything you have in writing, plus any notes you’ve made on phone calls etc into one place once the debt becomes overdue, as this gives you a solid base to work from. Any further communications with them should be documented, either in email form or through detailed notes from phone calls, which are then followed up with an email. Going through this documentation not only proves that you have made concerted efforts to reclaim the money you’re owed, but it might reveal any patterns or useful information to enforcement.

Consider Multiple Enforcement Strategies

If you have a debtor who is particularly resistant, then you might need to consider using more than one approach. In this case, a debt collection company will be able to help you design your strategies and carry them out for you, leaving you free to focus on your daily business activities while knowing that your overdue invoices are being taken care of.

Some debtors will try every trick in the book to avoid paying what they owe. Don’t let them. If you have a solid strategy with proven steps that you can action every time, it will become much less likely that accounts stay overdue. And if you need support, there are always organisations out there who can help. At Debtcol, we’re always happy to discuss how our professional, persistent enforcement agents can help you recover what you’re owed in a structured way that gets results. Just get in touch with us today to discuss your needs.