Debts are tricky business and with it comes the high chance of meeting people who’ll spit up one excuse after another about why they haven’t paid.
It can be frustrating, it can be annoying, and sometimes it can make you feel like you have no control over your business. But it doesn’t have to be like this. When it comes to successful debt collection techniques, it’s important to know how to handle excuses.
In case you find yourself in this kind of a situation, we’ve rounded up common excuses we’ve heard from debtors over the years and how you should answer them.
Keep reading to up your debt collection game.
“I don’t have enough money to pay you at the moment.”
The most common excuse you’ll hear is that the debtor doesn’t have the resources to pay off their debt. While it seems like you’ve hit a roadblock, don’t worry – we’ve got you covered.
Ask them to fill out a financial statement. Have one ready and it’s best to have a template for when you encounter instances like this. If what they’re saying is true, they won’t bat an eyelash and answer the financial statement with ease. Once they’ve filled it out, you can work with them about alternative payment options and schedules so that they can pay off their debt in a timely manner.
However, if they refuse to cooperate with you, you can inform them that the next step would be to settle things legally and in front of a judge. They’d have to disclose their assets and really, who would want to go through the motion of legal proceedings?
Talking about money can be awkward for anyone, so don’t be put off by their claims of having no money, show them that you’re keen to work with them to find a solution that works for everyone.
“I’ll be paying on (insert date).”
The sad reality is that people who repeatedly miss deadlines are usually the ones who make promises about paying on certain dates. They feel like they can get away with it. Don’t be fooled.
Have them write a document stating the dates they intend to pay. An email will do. When the date nears, give them a call to remind them of it. If they miss the deadline once, they’ll most likely do it again. After just one missed deadline, get in touch with a professional debt collector as soon as possible. You shouldn’t spend a ridiculous amount of time that you could be using in other areas of your business.
“I’ll get in touch with you soon!”
When someone says this, by “soon” they may mean “never”. These are the type of people that would stop communicating with you altogether, making it frustrating on your end. They have this unrealistic belief of “out of sight, out of mind” and that the problem will go away on its own.
Think of it this way: if they aren’t forthcoming about their situation, they don’t respect the business partnership you and they have and thus require a swift processing of debt collection.
A professional debt collector wouldn’t let this kind of excuse slide and leniency is the last thing you should be showing to these debtors. In this situation, definitely get a debt professional to help you chase up this debt and end the business relationship.
“May I have a copy of all of my documentation?”
This is another stalling tactic that you should expect from debtors who have no intention of paying you back.
From the get-go, all documentation between you and your debtors should be organised, that way if they ask you for it, you won’t be spending additional time putting the info together – instead you can give it to them right away. Then, if you do end up needing the help of a professional debt collector, all you need to do is hand over these documents to them.
“I will file for bankruptcy or sell the company if you don’t stop pestering me.”
Empty threats are another delaying tactic. If they truly had intentions of filing for bankruptcy or selling their company, they would have done so already.
If you are faced with a similar situation, simply ask for their bankruptcy number or the person in charge of the sale. They might not know what they’re talking about so try to explain the downside about filing bankruptcy. Show them that you know your stuff and that there could be alternatives that are much more agreeable.
“Sorry, but so and so’s not available at the moment. May I take your message?”
Feigning unavailability is yet another delaying tactic that many people have used in the past. This is most common in bigger companies where there are too many people and finding that one specific person can turn into a headache.
Are you up for a challenge? Find out who the big bosses are and make contact. If the person you’re looking for is top brass, the director or co-chairperson of the company will be able to pass on the message or, better yet, pay up. If you want to know who to get in touch with, visit the company website, ASIC, or their LinkedIn page.
Save yourself the hassle and work with a professional debt collection team
Be ready to meet people who’ll find a way to weasel themselves out of a debt, it can be hard to avoid when you own and run a business. Your best weapon is to equip yourself with useful information about how debt collection works in Australia and what you should do to protect yourself in future transactions. It is also highly recommended that you get in touch with a reputable debt collection agency that has seasoned professionals that can do the work for you.
A debt collection agency has heard it all when it comes to excuses for outstanding debts and their years of experience and resources can make dealing with them a whole lot easier than you having to do it yourself.
If you have a small to medium sized business in Australia and you’re having to deal with delinquent clients and customers who won’t pay their debts, just get in touch with us here at JMA. Our debt collection professionals help people all over Australia, including in Melbourne, Brisbane and Sydney.
Call us today on 1300 664 223.
