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    Top Secrets for How and When to Get Tough with a Debtor
    Top Secrets for How and When to Get Tough with a Debtor
    Top Secrets for How and When to Get Tough with a Debtor
    Ebook166 pages2 hours

    Top Secrets for How and When to Get Tough with a Debtor

    By Gini Graham Scott

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    About this ebook

    This book will help you get paid by a debtor who is reluctant to pay or has financial problems. Chapters cover: the five major reasons for non-payment, suggesting alternatives if the debtor can’t pay in full, handling stalls and objections, helping the debtor find money, dealing with disputes and negotiating settlements, responding to bad checks, making the final demand, and how to get tough.

    LanguageEnglish
    PublisherGini Graham Scott
    Release dateNov 10, 2009
    ISBN9781452392141
    Top Secrets for How and When to Get Tough with a Debtor
    Author

    Gini Graham Scott

    Gini Graham Scott, Ph.D., CEO of Changemakers Publishing and Writing, is an internationally known writer, speaker, and workshop leader. She has published over 50 books with major publishers on various topics and has written over 3 dozen children's books. Her published children's books include Katy's Bow, Scratches, The Crazy Critters First Visit, and Where's the Avocado? published by Black Rose Writing. She has published 8 children's books through her company Changemakers Kids and is a member of the Society of Children's Book Writers and Illustrators. She does workshops on self-publishing and creativity. She also helps clients write books as a ghostwriter and self-publish or find publishers and agents. Her websites are www.changemakerspublishgandwriting.com and www.ginigrahamscott.com.

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      Book preview

      Top Secrets for How and When to Get Tough with a Debtor - Gini Graham Scott

      Top Secrets for When and How

      to Get Tough with a Debtor

      by Gini Graham Scott, Ph.D.

      Author of a Dozen Books on Work and Professional Development, including Disputes, Disagreements, and All Out War and

      A Survival Guide for Working with Humans

      www.ginigrahamscott.com

      Smashwords Edition

      Copyright 2009 Gini Graham Scott, Ph.D.

      Discover other titles by Gini Graham Scott at Smashwords.com

      Smashwords Edition, License Notes

      This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each person you share it with. If you're reading this book and did not purchase it, or it was not purchased for your use only, then you should return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

      Credit: Cover Photos by... Image 1 - Real4to, Fotolia, Image 2 - Dmitri Mikitenko, Fotolia, Image 3 - Dusaleev V., Fotolia

      TABLE OF CONTENTS

      INTRODUCTION: THE DIFFICULTY OF COLLECTING DEBTS

      The Credit-Collections Connection

      How This Book Will Help You

      ABOUT THE AUTHOR

      CHAPTER 1: ADAPTING YOUR APPEALS TO THE DEBTOR

      Suggesting Alternatives if the Debtor Can't Pay in Full

      Taking Extra Steps to Get Your Money

      CHAPTER 2: DISCUSSING THE BILL WITH THE DEBTOR

      The Five Major Reasons for Non-Payment

      Finding Out About the Debtor

      CHAPTER 3: HANDLING STALLS AND OBJECTIONS

      The Right Attitude

      Preparing to Respond

      Dealing with Stalls

      CHAPTER 4: DEALING WITH OBJECTIONS

      The Debtor Claims Payment Is Impossible Because of Financial Problems

      The Debtor Claims to Have Longer Payment Arrangements than You Expected or Agreed Upon

      The Debtor Claims that an Error in Processing Your Bill Has Delayed Payment

      The Debtor Claims that Someone Else is Responsible for Paying the Bill

      The Debtor Has Died

      CHAPTER 5: HELPING THE DEBTOR TO FIND MONEY

      Sources of Funds for Making Major Payments

      Sources of Funds for Making Regular Payments

      Other Possibilities

      CHAPTER 6: DEALING WITH DISPUTES AND NEGOTIATING SETTLEMENTS

      Some Guidelines for Discussing the Problem with the Debtor

      Resolving Specific Complaints and Grievances

      Coming Up with Your Own Solutions

      CHAPTER 7: DEALING WITH BAD CHECKS

      Checks With Errors

      Unintentionally Bounced Checks

      Major Reasons for Bad Checks

      Responding to Bounced Checks

      Waiting for the Debtor's Response

      What to Do If You Suspect Poor Intent or Fraud

      How to Get Tough

      CHAPTER 8: MAKING THE FINAL DEMAND

      Arriving at the Final Demand Stage

      No Going Back

      Types of Demands

      Making a Preliminary Demand

      Some Preliminary Demand Letters

      The Short Collection Message or Memo

      The Mailgram, or Messengered Letter

      How Long to Wait

      Making a Final Demand

      Waiting for the Debtor's Response

      CHAPTER 9: HOW AND WHEN TO GET TOUGH

      When to Get Tough

      Your Four Options

      RESOURCES AND REFERENCES

      OTHER BOOKS BY THE AUTHOR

      AUTHOR CONTACT INFORMATION

      INTRODUCTION: THE DIFFICULTY OF COLLECTING DEBTS

      For many people, the process of successfully collecting debts is fraught with conflict and uncertainty. You ask for the payment you have coming, the debtor gives you an excuse, and you don't know what to say next. Is the excuse really true? And even if it is, how do you convince the debtor to pay you?

      Many creditors give up on collecting debts before they should because they fear the debtor's ill will. Some stop trying because they assume the debtor is a won't-pay deadbeat who has no money, when this is not the case. Still others give up because they aren't aware of the legal remedies available to them, and don't know how to show the debtor they are really serious.

      On the other hand, some creditors become so emotionally involved and pursue their debt so energetically that they may end up owing the debtor money when the debtor sues for libel, slander, harassment, theft, assault, extortion, or other illegal collection practices.

      If you want to collect the money people owe you, you need to know the rules of the collection game; then you can be creative within these general guidelines. Indeed, in many instances, it is necessary to be resourceful; you will be competing with other creditors for payment from a debtor who doesn't have enough to pay everyone, or who uses a priority system to pay the more important debts first. In that case you have to find a way to make your claim come to the top of the pile—or perhaps look for non-monetary alternatives to getting paid.

      Of course, collecting what you are owed is only half the story. The other half involves taking preventive measures in advance to protect yourself from collection problems. Depending on circumstances, these measures can range from writing up effective loan agreements to making decisions about when to extend credit and to whom. A strong credit policy will help you decide under what circumstances you will extend credit—and how much you will risk.

      The Credit-Collections Connection

      Anytime you make an exchange with anyone and don't immediately get cash, you are extending credit. And that includes working for someone, accepting a check (in reality a promise to pay), billing someone for a product or service, or making a loan.

      If you think about it, you'll realize that every society operates on some form of credit. Even a simple society that uses barter instead of money incorporates a credit system. Say a person performs some activity for another, such as working in a field sharing food from a hunt. That activity establishes a debt whereby the other person is expected to perform some reciprocal action in return--perhaps doing work in the future or sharing later from his own supply of food.

      Thus, credit is, in a sense, the grease that keeps the wheels of society moving. Credit facilitates relationships: not every transaction can be immediately concluded with a payment in money, services, or products in return. But because the parties to a transaction agree or expect that reciprocal activity or payment will occur at or by a certain time, they can proceed with their current business, trusting that they will get paid.

      In any situation where you extend credit, you have to determine an acceptable risk level. You must also realize that you are making a trade-off between your investment of time and energy in the transaction and your expectation of getting paid. In effect, there is a trade-off between sales and credit; if enough people refuse to buy from you without credit, your conviction that you are saving money by refusing credit to your customers may come back to haunt you.

      Extending credit can indeed increase the likelihood of making a sale. But the very act of extending credit brings with it a measure of risk--however small--that payment will not be forthcoming. Accordingly, you must weigh the value of making a transaction that can increase your business, help a friend, or strengthen a relationship with the possibility that you will not receive the expected payment.

      Being too conservative in extending credit can lose you sales (or even damage some of your personal relationships, though personal borrowing is not the province of this book). On the other hand, being too liberal can create severe financial problems for you and possibly lead to a business or personal bankruptcy if you don’t get paid. You must strive for a balance that works for you and decreases your risks by maximizing the chances that you will effectively collect the money people owe you.

      How This Book Will Help You

      This book is designed to help you collect this money in two ways.

      First, it will help you establish a good credit policy so you can make the best decision about whether to extend credit (in the form of money, work, or sales).

      Second, it will help you determine exactly what to do when you have problems collecting after you have extended credit.

      Secrets for When and How to Get Tough with a Debtor takes into consideration that your strategies for extending credit and collecting will differ depending on the debtor's individual characteristics and personality. The book also deals with the legal niceties of what you can and cannot do when you try to collect--so you don't end up owing more than you're owed.

      While this book is designed especially for the small business person owed a small amount of money (up to about $5,000, which is the limit on small claims cases in many courts) individuals or business people who are owed much more should find the basic principles and strategies discussed in this book useful as well.

      ABOUT THE AUTHOR

      Gini Graham Scott, Ph.D. is the author of over 50 books and a seminar/workshop leader, specializing in work relationships and professional and personal development.

      She has written a dozen books on work relationships, achieving your goals, and enjoying your work and life more, including: Want It See It, Get It!, Enjoy! 101 Little Things to Do to Add Fun to Your Work Everyday, A Survival Guide for Working with Humans, A Survival Guide for Working With Bad Bosses, A Survival Guide to Managing Employees from Hell, and Disagreements, Disputes, and All-Out War – all from AMACOM. A number of her books have dealt with management topics, including: Work with Me! Resolving Everyday Conflicts in Your Organization (Davies-Black) and Building a Winning Sales Team (Probus).

      She has a Ph.D. in Sociology from the University of California at Berkeley, and MAs in Anthropology, Mass Communications and Organizational/Consumer/Audience Behavior, and Popular Culture and Lifestyles at Cal State East Bay.

      She has gotten extensive media interest in her previous books, including appearances on Good Morning America, Oprah, Montel Williams, CNN, and hundreds of radio interviews. She has been frequently quoted by the media and has several Web sites for her books on improving work relationships and professional success, including:

      -Enjoy! 101 Little Ways to Add Fun to Your Work Everyday (www.enjoythebook.com),

      -Want It, See It, Get It (www.wantitseeitgetit.com),

      -Disagreements, Disputes, and All Out War, A Survival Guide for Working with Humans (www.workingwithhumans.com),

      A Survival Guide to Managing Employees from Hell (www.workingwithhumans.com),

      -A Survival Guide for Working with Bad Bosses (www.badbosses.net)

      The site featuring her books and speaking on work generally is at www.workwithgini.com. Her overall workshop is at www.ginigrahamscott.com.

      CHAPTER 1: ADAPTING YOUR APPEALS TO THE DEBTOR

      The appeals process described in the previous chapter is a typical approach used by professional collectors in dealing with most debtors. You seek payment in full, and you use increasingly intense appeals to motivate the debtor.

      However, at times you need to vary your approach to deal with certain circumstances. For example, if you think the debtor may be having problems paying in full, you can suggest that you are open to an alternate payment arrangement. Another possibility is to develop a creative payment program where the debtor pays you in merchandise or services, or pays you by continuing to buy needed products or services from you, but adds a little bit extra to pay off the past debt. Then, too, if the debtor has failed to follow through in paying you through the usual channels (such as sending a check by mail), you may need to show you are willing to take extra steps to make it easier for the debtor to pay.

      The following chapter describes these methods of adapting the appeals process. You can also be creative and devise other strategies to suit your situation.

      Suggesting Alternatives if the Debtor Can't Pay in Full

      Although it's preferable to request immediate payment in full in your first appeal and leave it up to the debtor to request other terms, at times a debtor may be too embarrassed to admit to financial problems.

      If you suspect

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