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An Overview of the Best Debt Collection Techniques

An Overview of the Best Debt Collection Techniques

Collecting debts in today’s tough economic times has become more difficult than ever before.  Some creative and well thought out debt collection techniques can increase the likelihood of a debt being paid sooner rather than later and result in a better situation for both the person who owes the money and the company owed.  The best debt collection techniques are those that get attention without being rude, annoying or disrespectful.  This can be a difficult thing to attain when it comes to approaching a debt, but with careful debt collection techniques, you can acheive it.

One of the debt collection techniques that has become a waste of time over the years is the debt collection letter.  This is because many debt collection letters are ignored by those for whom they are intended – either they never open them because they don’t know it’s important, or more likely because they know what it is and don’t want to read it.  There are ways to send letters that people will not only read, but actually respond to.  The personalized letter is one of the best debt collection techniques out there.  While it is not always possible for large collection agencies and companies to do this, for smaller companies it is a wise choice.  A personalized letter should appeal to the person’s sense of responsibility and use their name.  Hand written envelopes are a great way to ensure the letter gets opened, because it is immediately obvious to the recipient that it is not junk mail.

There are a few other debt collection techniques that can bring great results.  One of these is to offer a deal.  Many people will jump at the chance to get rid of a debt entirely if given a discount on debts paid in full.  For example, if you tell them that you will take 10% off if they pay the bill in full by a certain date, you will find that they are happy to take the deal.  Getting slightly less money is certainly better than getting no money at all, and clears a number of debts quickly.

Harsh debt collection techniques rarely work, but in some cases it is necessary to remind people of the consequences of failing to pay bills on time.  This is best done in a simple manner rather than a threatening one. Remind them of the potential damage to their credit and how long it can last, and the many ways in which it can hurt them.  In some cases, you may find that this will fail because their credit is already bad and they don’t see the difference.  There are other debt collection techniques that will work better on this type of person.

Debt collection techniques need to be forceful but also creative and respectful.  Almost everyone has debt, and everyone has had trouble paying a bill from time to time.  You will find that in most cases an approach that makes you appear to be helping rather than harassing is the best way to get a debt repaid quickly and easily.

Photo courtesy of willc2.

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