Debt negotiation is one of the most difficult parts of a debt collector’s job. It’s an emotional minefield that’s hard to navigate if you’re not up to the task. But as a debt collector, it’s your job to speak with people who owe money to the companies you represent and get them to settle their unpaid debts. Here are some negotiation strategies that can help make your job a little easier.
Always Begin with a Reminder
One of the easiest ways to begin negotiations with a debtor is through a simple reminder. This can either be a gentle reminder through a phone call or a simple nudge in the form of a written notice. Many debtors are honest people who simply forgot about the debt. Others are trying to settle their unpaid debts and just need a slight push to complete their payment. Those are the people you’d be aiming for.
Unfortunately, reminders can fall on deaf ears. Some people refuse to even acknowledge their debt. For these stubborn cases, a reminder of their debts and obligations is still a good first step to begin negotiations.
Categorize and Act Accordingly
Speaking of beginning with reminders, make sure you ask for full payment of the debt on your very first call. Requesting full repayment sends the signal that you’re serious about debt collection while not being too aggressive in your approach.
Based on the response you get from your request, you can categorize every debtor in three ways:
- Will pay and has the capacity to pay
- Will pay but doesn’t yet have the capacity to pay
- Won’t pay the debt
The first one is always the easiest to handle. Sadly, they’re also the rarest among the three. The second is still easy to deal with. You can work with the person to set up an easy payment schedule or discuss reducing the total debt amount in return for payment in full.
The last one is always the hardest and will require further strategizing.
Leave Some Room for Maneuvering
Some debtors who refuse to pay may be holding out for more favorable terms. You’re not really obligated to give them those terms, but it helps to be open to discussion. Being open to negotiation tells them you’re flexible but still serious about collecting debt.
Make your offer, but leave a little room to maneuver. When they don’t agree to your terms, ask for a counter-offer. Work with them to find terms that are favorable to both parties. It is important to know when to draw the line. Your main goal should be to create payment terms that allow you to get the most returns in the least amount of time. Remember that no one really benefits from payment plans that cannot be paid.
Put Southwest Recovery Services to Work for You
If you need help recovering the money you’re owed, call Southwest Recovery Services today. Our agents will represent your company in a positive light while they establish rapport and find payment solutions that work for all parties. We have multiple locations throughout the country, and we can collect on debts anywhere in the US. We look forward to helping you keep your business above water!