debt recovery

Can’t Repay Your Debts On Time? You Should Negotiate and Make Repayment Plans

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Being a delinquent debtor is already stressful, but when a debt collector Singapore comes into the scene, that adds up stress and humiliation.


It’s rather unfortunate for the debtors that their creditors have become relentless these days, peppering them with letters, emails and phone calls in an attempt to recover their dues. Unexpected phone calls during work hours, or when you have guest at your home, can make you lose temper. But, this is what debt collection services are paid for, no matter what you feel. Plus, they’re authorized by law to call you on your cell phones, if you have included your cell number on the loan application. See article things that debt collectors shouldn't do


Why Debt Collectors Are Involved

Creditors don’t always receive their debts on time. Sometimes they have to remind their customers, and when they couldn’t get their money back after all their efforts, they tend to hire professional debt recovery services. The reasons for outsourcing may include:
•    Delinquent debtors have not replied their postal mails, emails or phone calls.
•    Delinquent debtors must have changed their contact information, location or credit card
•    Delinquent debtors have shown no interest in repaying their loans.

Debt collector works for, and on behalf of, the original creditor and receives a certain amount or some percentage of recovered debt in exchange. If you have to face a professional, the only way you can escape is, by paying the whole amount or the part of it, or buy ascertaining that you’d pay back your dues before a specific date.

What Options You Have

As the debt becomes delinquent, it may be considered as uncollectable. At this point, debt collectors may offer you to settle your debt once and for all. Your debt will be written off after paying an amount lower than the amount owed. Here, your debt collector is more keen to recover the amount quickly. 
In general, debtors are given two options to settle their dues.

1. Final Settlement for Cash
Final settlement of debt is an ideal way for both, the debtor and the creditor. In this arrangement, your debt will be fully satisfied and your credit score will not be affected. Plus, you don’t have to pay back the whole amount. You make the payment and your creditor writes off the remaining debt as consideration. 

2. Term Settlement
It is similar to final settlement, except for the fact that the amount owed is not reduced. Moreover, you are given a specific time period during which you can make a payment or series of small payments to settle your dues. 

Finally, as a responsible borrower, it is your duty to repay your debts within specified time, and it always affects your credit scores positively. You do have negotiation options in case you don’t have resources to repay your dues, but this doesn’t mean you can always run up to the negotiation phase. Failure to pay your dues could go against you in the long run, plus debt collection services can take legal action against you if negotiation failed.

 

5 Things Debt Collectors Must Not Do

No business would want to scare his customers away or get negative reviews online.

But at times, businesses do that intentionally or unintentionally when they had to deal with debtors.

What separates good businesses from bad ones is their flawless strategy to recover debt. They may have a separate risk management department calling customers to clear their dues, or rely on debt collector singapore agencies for this purpose.

So, if you hired any such service, make sure it follows the rules and regulations set by the governing body or association. Be careful while choosing any debt collection service because they might end up ruining your brand reputation.

However, you may give a line of action to your debt collector and the debt collection agency and share these 5 things and make sure that your debt collector doesn’t do it.

1. Sending Angry Mob

If you think sending an angry mob to your customers can get you the money, think again. Your debtors have a right to call the police for such unlawful assembly. 5 or more people gathering with an intention to take the money by force or offence is an act of crime in Singapore.

2. Vandalism

It is an act of violence – destroying or damaging a private or public property with or without a motive, and it results in conviction. So, give clear instructions not to use this practice on any of your debtors.

3. Violence

Banging on customers’ doors, shouting, abusing or insulting them, or threatening to beat them, these acts come under violence. Your customers can call the police and later, your debt collector might reveal your name. Therefore, it’s better to choose someone who adopts professional ways to recover the dues.

4. Harassment

If a person causes harassment, distress or alarm to someone by abusing him or using inappropriate vocabulary; or show unacceptable behavior to recover the money owed; all of these acts are illegal. In doing so, there is a higher probability of conviction than getting the money back. Harassment is by no means acceptable irrespective of the cause. So, don’t let them practice it on your customers.

5. Taking Possession of the Things Customers Own

Debt collectors are not allowed to possess or seize the property of the customer without legal notice. So, let the concerned agency know that it must apply in court to get the writ of seizure and sale, before taking possession of the property. Instead of threatening the customer, it is better to send a notice stating the next step, if he fails to repay the amount.

Professional and experienced services understand that there is a great risk in practicing these acts on customers. So, think twice before choosing the right service for debt recovery.

Read about our earlier article on interesting things to know about debt collection.

5 Reasons to Hire Professional Debt Collection Agencies

Every business goes through a period during which owner has to deal with outstanding account receivables that must be collected to keep it running. When this happens, one in two common approaches may be adopted to collect those receivables.

•    In-house Approach: The simple and traditional approach is to collect delinquent debt by means of in-house operations. Although, in-house approach is productive and more likely to be your first choice, your company may not have the time and resources to pursue it effectively. 

•    Professional Approach: Another approach is to opt for professional debt collection service equipped with all the tools and techniques to handle this tedious task. This approach is much better when dealing with debts older than 6 months, or the ones with the least chances of recovery.

There are plenty of reasons why you should choose professional debt collector singapore to recover your delinquent account receivables: 

1.    Specialization

If you had the capability, you wouldn’t have been dealing with unpaid debts. So, you need specialists to accomplish the task. As a third party, outsourced services understand the sensitivity of the matter and they look at it with a different perspective. Debt collectors specialize in assessing customers’ records, their financial stability and ability to pay debt. Moreover, they know how to communicate the problem and create a win-win solution. 

2.    Effectiveness

Tracking down delinquent customers isn’t always easy. Most of the time, it is more time-consuming than getting back the amount. Professional debt recovery service can save your time and expenses in finding those customers and employing resources to recover what is owed. 

3.    In-depth Tracking

Don’t think that the term “tracking down customers” only refers to the in-hand information you have. For customers who must have changed their contact information and address can be tracked down using latest software, social media, credit card transactions and more.

4.    Positive Attitude

Even if you succeed to track your customers, what are the chances that you get your money back? Naturally, as a creditor or an unpaid seller, you may become impolite in compelling your customers to get back your rightful amount. Your customers may get confused, or sue you for harassment. 

A professional debt collector knows how to compel delinquent consumers to re-pay their debts, through legitimate ways:

•    By means of negotiation – dividing the sum into weekly, monthly or quarterly installments
•    By tracking down their financial condition and encouraging them to clear their dues
•    By informing them how this non-payment may affect their future credit scores
•    By sending them legal notices and forcing them to pay back their debts

5.    Keeping Customers Satisfied

In dealing with your delinquent customers, you always have a risk of losing them. In this scenario, the best you can do is, hire a professional debt collection service that promises to deliver results without turning your customers away. Today, when businesses are focused on customer loyalty, these services help them by working side by side focusing on outstanding account receivables. They create result-oriented strategies that not only benefit original creditors, but also put less burden on customers.

Conclusion

Risk management has become a key contributor in determining organization’s success and hence, debt recovery services are getting increasingly important for modern-day businesses. They help businesses minimize the risk of losing money and customers through effective strategies. 

How to Pay Off Your Debt in 9 Simple Ways

 

Are you worried because a debt collector has just reminded you to clear your dues before a certain date, and you have no idea how you’re going to pay it off? You’re not the only one dealing with this problem. In fact, the majority of debtors don’t know how much they’re supposed to repay. Anyhow, you have to be vigilant because delinquent debts may affect your credit scores anytime. 

So, if you’re looking for ways to repay your debts, here are 9 possible ways do it:

1.    Budgeting
This may seem like an “old-school solution” to you, but it’s the best and probably the easiest way to monitor your financial position. There are plenty of financial tools to create an income/expense sheet that can help you cut down expenses and pay your dues. 

2.    Concentrate on the Most Expensive Debt
If you have more than one creditor, arrange the interest rates in descending order (from highest to lowest).  According to experts, clearing high-interest debts always help to maintain a high credit score. Moreover, debt recovery services will also advise you to repay the debts with high interest.  

3.    Impact of Paying More than Minimum Balance
Try to pay more than what you're supposed to pay on monthly basis. If you stick with the minimum balance, it will only prolong the debt payoffs. You can make weekly payments, or double the number of monthly payments. In this way, you'll show strong commitment of paying everything off.

4.    Balance Transfers
Here's another strategy to reduce the burden. If you're confident to pay back the balance with high-interest rate, in two or three months, you can transfer the debt to a credit card that doesn't charge anything (zero-interest) on balance transfers. Make sure, the balance must be paid before expiration; otherwise, you'll end up getting the much higher rate.

5.    Stop Credit Card Spending
This is yet another old-school trick, but it always works. You can halt the spending via credit card and prevent debt accumulation. It’s quite hard to leave your credit card at home, especially when you can earn reward points and cash backs. But controlling your finance is more crucial right now.

6.    Allocate Monetary Incentives toward Debt
Think about the bonus you’re going to get next month. You can utilize it to pay back your debts. If you have a debt payoff plan, allocate your extra earnings toward minimizing your debt burden. So, cancel any plans for vacations this year, because, you’ll get more satisfaction when your debts are paid off.

7.    Don’t Forget to Remove Credit Card Information Online
Online shoppers often tend to store their credit card information on e-commerce stores, just to save few minutes. The bad side of this practice is, you may be charged for the things you don’t really want. Instead, use debit cards to pay for recurring services. 

8.    Sell Things You Don’t Want
Surely, there will be plenty of unwanted things in your house, and you can sell them online. In this way, you can earn quick money and repay your bills.

9.    Change Your Lifestyle
Other than emergency situations, people often become indebted because of their lifestyles. So, before you get a call from debt collection agency, think about your routine and see where you can cut down your expenses.

 

All You Need to Know About Debt Collection Services

Are you worried because you don't have enough money to clear your bills and anticipating a call from a debt collector? If it's for the first time, you must be having a lot of fear and concern about the process. You have landed on the right place to have the basic knowledge about debt collection services.  You will learn about their perspectives and motives, and interact with them less stressfully. But before you move on to the process, it's important to know the time period, after which you will be contacted by such professionals.

Delinquent debt

When the time of the due date of debt payment passed at least 60 days, the payable is considered as delinquent debt. It can be of any type; medical debt, automobile loan, credit card debt, personal loan, student loan, business debt, payday loan debt and unpaid bills.

Debt Collection Services

Most debt collectors work for agencies while some of them work independently. The majority of the time, they offer debt recovery services to original creditors, remitting delinquent debts. In return, they're paid with 25 to 40 percent of the recovered debt. So, they earn more if they recover more.

Agencies collecting debts have different expertise based on the debt-type. They tend to take the recovery job on two conditions and set their rates accordingly.

·         The debt limit must be more than the least specified amount

·         The debt must be of reasonable age (more than 60 days and less than 2 years)

Reputable debt collection services follow state and federal laws very strictly.

If the debts are high in value and the consumer is in no capacity to repay the whole amount, these agencies settle for less amount, helping both; the consumer and the principal creditor. If the consumer strictly denies to clear his dues, they may file a lawsuit to collect the dues.

The Process

There are different ways to collect debts.

·         With the help of contact information given by original creditors, debt recovery agents try to reach delinquent borrowers through phone, emails and postal mails, convincing them to repay their dues.

·         In the case of failure to contact, they search for borrowers' information via private investigators and computer software. They look for bank accounts, brokerage accounts and other assets of debtors, and determine their ability to clear their dues. 

·         In order to force the debtors to clear their delinquent debts, these agencies may inform credit bureaus of their unpaid dues which would affect their credit scores.

Debt collectors are also hired to recover dues from those debtors who have received court's judgment to repay their debts, but they have failed to comply. In this situation, debt collection service may perform any or all of the following:

·         Impose levies on motor vehicles or bank accounts

·         Place lien on their respective properties

·         Force them to sell their assets  

What You Should Do?

Avoiding paying the delinquent debt will always impact your credit scores negatively. If you're the one dealing with debt collectors, there's no need to run away from them. They are professional enough to provide you a feasible solution to repay your old dues and improve your credit scores. Therefore, it is advisable to negotiate with them and settle for a reasonable debt repayment.

Accounts Receivable Management Tips for Small Business

One common strategy many small business owners use to beat the competition is extending credit to their customers. For instance, some companies allow their customers to delay payments for the products or services already provided. This customer retention strategy, however, is not without risks. Improper management of accounts receivables may result in cash flow problems. If your business has thousands of dollars in delinquent accounts, something is wrong with your receivable management policy. Hiring a debt collector for the job would be a good idea, but there are certain things you can do on your own to better manage your accounts receivables. 


Tips on How to Better Manage Your Accounts Receivables


•    Develop a credit policy – Your business should have a well-thought-out credit policy in place. Make sure your credit policy clearly states who to extend credit to, and terms and conditions for extending credit. Consider creating a customer credit application form and get it filled by every customer who you extend credit to. That way, you will have all the necessary details about your customers, including their names, addresses, bank references, credit history, and income sources. Your credit policy should also have detailed instructions about how to deal with late-paying customers and what actions should be taken if a customer refuses to pay. 


•    Create and send out invoices on time – One way to improve your chances of getting timely payments from customers is by sending them detailed invoices on time. Make sure you provide all the necessary information on your invoice, so that your client can approve and process your payment quickly. For instance, your invoice should include your contact details, date of the invoice, details of the products or services provided, unique referenced ID, payment terms, and due date. Try to avoid vagueness as much as possible. For instance, “$5 will be charged on all payments after due date,” is more specific than “penalties will be charged for late payments.”  


•    Start following up early – It is always a good idea to send remainder a few days before the due date rather than waiting for an invoice to become past due. Start following up early, but make sure you don’t offend the customer. If the invoice is already past due, you can send an email asking whether they have received the invoice or have any questions about it. 


•    Continue sending reminders – Not getting timely payment from clients is a common scenario, so you should be prepared for this. Simply start by continuing to send reminders to the client who has not paid on time. Try to get a written confirmation from the client and ask for a specific payment date. Keep a record of his responses for future reference.


If a payment is due for more than 90 days despite several reminders, perhaps it is time to seek professional help. Make sure you choose a collection agency that has years of experience in providing receivables management services. The goal here is to collect your accounts receivables without hampering your customer relationship.  

Contact Us for a non obligatory discussion if you need assistance in this area.