If you have time and energy to perform the task of collecting debt by yourself. Below are few helpful tips that you have to keep in mind.

Bringing All The Proof Document With You

Prepare yourself for a drawn out battle. Make sure that you brought along any proof of debt such as invoices, receipts, and anything related to the debt you’re pursuing. Besides that, you also have to ensure that you print out all the email you received from these business transaction and conversation history you made with these debtors if you have one.


Be Professional And Civilize At All Time

Whenever you approach debtors, remember to be professional and civilize when you asking them to pay up their overdue account. Don’t make the matter worst by making threats and using aggressive language. Keep your tone friendly during the first couple of engagements - there may have been a misunderstanding or circumstances that have prevented a partner/client who is traditionally a prompt payer from settling the overdue account. To begin with, give them the benefit of the doubt.

If you still haven’t received payment or any words from your debtors after a few contacts. Then, you may remove the friendly tone, but still remain professional. This is the time for demanding the payment, not asking for it anymore. Don’t threaten to use legal action unless you really mean to carry it out. Equip yourself with some knowledge about the legal consequences that debtors have to face with if they don’t pay up their debts. Let them know loud and clear, make them think twice before refusing to pay up again.

Become A Persistence Debt Collector

When a client says that he will make the payment on Monday, follow up the payment by Monday evening. Let them know that you wouldn’t be fobbed off easily. If they still didn’t response to your email within 24 hours, try calling them through phone or other communication medium. The annoyance you’ll cause them will help speed up the payment.

Making A Personal Visits To Debtors

Some debtors are too stubborn and they just simply ignore the emails, but they will turn their attention to it when there is a threat of face to face confrontation with their creditors. If possible, you can try setting up a face to face meeting with your debtors to discuss their overdue account. It might encourage them to take out their check book and make the payment just to avoid the embarrass confrontation with you storm inside their office demanding payment. If you do decide to drop in either through arranged or surprise visit, please make sure that you remain professional at all times. Don’t go screaming and threating people while you are in their premises, you might find yourself behind in bar and keep on losing money on bail. Remember to take someone along with you as a witness or someone that can cool you down when things get messy.

Offer Them Alternate Payment Term

If the clients or partners are struggling with financial problem, but they are too embarrass to admit it. You can try offering them terms of payment. For example, John owing you $3000 in debt. If he has financial problem, offer him to pay up in terms such as 3 months ($1000 per month), 6 month ($500 per month), etc. Don’t take advantage by charging interest or something. Be respectful and don’t use any insulting words. Further more, ceasing all pending work for this client while the debt is being paid off.

When There Is Nothing You Can Do Anymore..

If you’ve tried everything and you still haven’t been able to collect the debt, a call to your lawyer is worthwhile, or trying a debt collection agency. Sometimes if a debtor sees that a third party has been brought in, it will rattle them enough to settle the account.

Taking Legal Action

Many people threaten each other with legal action over debt; but the truth is that using the court system to collect debt can be very tedious, stressful and expensive. Depending on the country, it could be also be very impractical.

Firstly, your lawyer will need to provide the debtor with a letter of demand formally threatening legal action. If it still isn’t paid and goes to court, then you will need to prove to a court that the debt is authentic. If the claim is proved, then the debtor will be given further time to settle the debt. If the account is still not paid, then you need to organize for the seizure of assets - and in many cases the assets of companies are leased or under someone else’s name - leaving you with nothing to actually seize.

In a nutshell, a debt needs to be many thousands of dollars before heading to a court, with the exception of circumstances where the debtor is located in your state/country and you have access to a small claims tribunal.

Bear in mind too that every time you speak to your lawyer or instruct them to do something, it’s going to cost you money - a further amount that you will need to claim from the debtor. If the debtor is already in dire financial trouble you may find yourself, even after successful legal action, a lot worse off.

Rather than a full court case, the strategy of reporting the debtor to a credit reporting agency is probably the better way to go, as a blemish on a credit report can prevent the debtor from carrying out business effectively and obtaining other lines of credit.

But, as the old saying goes, an ounce of prevention is worth a pound of cure…