The Future of Debt Collection during Pandemic
Every aspect of our lives has adversely been affected by the Covid-19 pandemic. Businesses are struggling and revenue dwindling as a result of reduced activity. Creditors have to be shrewd and ingenious to collect their dues from debtors.
Various governments have come up with stimulus measures to cushion its citizenry from an economic crisis. While this only alleviates the financial distress in the meantime, it does not eliminate the debt pressure that had been incurred by the business. Many businesses will strain to keep afloat and continue to surmount this financial depression.
Since it is unclear how long the pandemic and the financial stress will last, it is crucial for the debt collection business and creditors to re-strategize how best to recover from debtors.
Creditors ought to
Maintain open communication with debtors
When communicating with debtors, creditors should endeavor to achieve a win-win situation. You need your money paid and require the client for future business. The client ought to be treated with the utmost respect because of the pressure associated with the pandemic.
While contacting your creditors, avoid alarming your client with threats and aggression. Communication will help you establish which debtor is adamant about paying and who is in genuine financial distress.
Agree on a New Payment Schedule
Each credit case is unique from the other. So, if a debtor’s business is performing dismally, you can choose to come up with a payment plan that incorporated their ability to pay. For instance, you can prolong the credit term to afford them time to repay while this ensures you do not lose your money.
Act swiftly if promises do not pay
As much as creditors try to reach an amicable solution and avoid legal redress, some situations might require you to take stern measures. In cases where the client is refusing to pay, seek professional advice to avoid litigation in the future. This will protect you and ensure debts are paid in the event where the debtor is declared insolvent.
Send Debt Collection Letter
Send your debtor letter demanding payment despite the lockdown. This keeps the communication lines open and helps to establish the ability of the client to pay during the pandemic.
Plan for Online Payments
Making payments online is easy and convenient and enhance social distancing during the pandemic. Explore the numerous online options so that your clients can start paying off their credit in manageable chunks.
Track your Clients Credit History
You can obtain your clients status report to help you study their credit behavior. Delinquent clients are likely to be declared bankrupt. In such circumstance, you should get the required legal documentation to write off the uncollectible debt.