7 top tips for handling difficult debtors in South Africa
Here are some tips we have put together on handling difficult debtors:
Make sure you contact the right person
Make sure that you are talking to the correct person in the debtor’s company. Do not let the debtor refer you to other people to engage you and actually not be able to resolve the matter.
Be firm and direct
Make it clear from the word go, that you are not letting this go and you expect payment for the products or service that the debtor has purchased from you. Remind the debtor that you have in good faith fulfilled your side of the contract by providing the services and goods and you have every right to expect payment for it and that your expectation is reasonable.
Be professional and formal
When communicating with difficult debtors it can be extremely frustrating and you can easily be pushed and aggravated, by staying professional and keeping a cool head you will also show the debtor you are serious and not threatened by their actions.
Be focused and to the point
The debtor will use every trick in the book to divert you from the issue at hand by discussing personal stories and making innumerable excuses. You must keep the conversation focused and on track, time is money and you are already investing precious time in trying to get the debtor to pay up, focus on getting a clear collection plan or commitment to repay.
Ask questions and push for answers on why payment was delayed
By interrogating the debtor, you can usually get to the bottom of why payment is not forth coming. Especially if you find that this process will take a number of calls to complete, keeping track of the stories and reasons for non payment will make the debtor feel uncomfortable. Keeping the debtor in a state of high stress is the ideal way to pressure them to settle, they will literally do anything to have you stop calling them.
Report debtor to credit rating agencies
If all else fails, then you must inform the debtor that you are reporting them to the four large credit bureaus in South Africa. A debtor will no doubt realize that an impaired credit record will most likely mean the death of his or her company, once the debtor realizes that you are serious and this threat is real. They will usually make a plan and settle the account. Reporting a debtor to a credit bureau can affect their chances of getting future credit for as long as 7 years. This is a life time in business terms and will most certainly get their attention.
Litigation is your last resort
Warning the debtors of your intention of taking them to court for non payment is by far the last resort, litigation in South Africa is expensive and time consuming. If all else fails and you still feel that the debt can be retrieved, then consulting an attorney is key to determining whether litigation holds any hopes of success.
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