April 6, 2013

Debt Collection and the Power of Urgency

When debt collection is performed with a sense of urgency, then the chances of actually recovering the bad account increase exponentially.  There are many reasons for this, but let us analyze a few of these reasons.

  1. Age of the File – The age of a bad account actually plays a huge part in whether it is recoverable.  Why is this you ask?  As we all have witnessed, businesses can go bankrupt seemingly overnight.  They can also change their number or move locations, making it harder to track them down.  Management changes and they may not have any idea about the debt.  Some businesses keep bad books too, so the older a file is the harder it is to track down the invoices to prove that they actually owe the money.  Needless to say, the sooner you can act on a file, the better off you are.
  2. Motivating the Debtor – If you call the debtor and have no sense of urgency, then you are unlikely to inspire them to repay the debt.  If you call up and light a fire under the debtor and instill a strong sense of urgency, then you can turn the tide with the debtor.  This has been proven time and again in our business.  When we call and set firm deadlines with the debtor, we are able to recoup your monies at a substantially higher rate than without deadlines and urgency.

These are 2 of the main reasons to act with urgency and a sense of expediency when implementing your debt collection tactics.  Otherwise, you will seldom collect and be sitting there with a pile of old debts, that could have been recovered.

March 28, 2013

Where Did Credit and Debt Begin?

Filed under: collection agency,Debt Collection — Tags: debt collection, debt collection agency — Peter Pinette @ 3:08 pm

Credit and debt are not a new phenomenon.  They have been around for thousands of years, the only difference is that the consequences were much harsher in the past.

The ideas of credit and debt were first formed when someone would lend cattle to a neighbor and would expect to repaid with more cattle, because there would be more cattle at the end of the term.  From this stemmed the idea of interest, and soon people could undertake debt on their purchases.

In the old days, farmers would buy a piece of land and finance it.  They would have to repay the land by working and harvesting the land, thus there was a strong motivation for the farmer to repay the debt.  If a farmer was not able to repay this debt, then they would either have their land seized or would have to sell themselves into slavery.  This was much more motivating for the debtors and they normally produced higher than a farmer who was not in debt.  Wouldn’t you?

In today’s day and age, debt and credit are still prevalent.  The repercussions from not paying a debt are no where near as harsh.  The most punitive consequence of not paying a debt is that your credit score will suffer, which will prevent you from receiving other loans.

When speaking of debt, The United States always comes up, which has a national debt of almost 13 trillion dollars.  The United States is run on debt, and this debt may be a ticking time bomb.

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