A publication for Credit and Finance Professionals
Too long at the bargaining table...
I have found over the course of many years in the debt collection business that certain fundamental truths exist, which can be counted upon in all but a few cases; creditors who understand the implications and are committed to reducing write-offs are typically better armed for the competitiveness that characterizes the debt collection environment today.
I have personally reviewed numerous cases, which I believe underscore at least one or all of the following important lessons. We try to fervently pass along these reminders in our daily servicing of client accounts. Understanding and applying these lessons will, in most cases, facilitate a more positive outcome than would be experienced by the inertia of bargaining too long with truculent debtors.
Collection Lessons Learned:
There is never enough money for everyone to be satisfied.
Debtors know more than they divulge to their creditors.
Debtors rarely single out one creditor as the designated vendor not to be paid.
Adjacent creditors who are owed money by the same debtor ALL want to be paid first, the more aggressive creditors usually take the lion's share.
Creditors that hesitate, while others do not, will always lose.
When the window of opportunity for collection exists it must be seized, because it will shrink with each passing day.
Creditors are no different than collection agencies in one respect. If the "end game" is to maximize recoveries on defaulted customer accounts; each must recognize the point at which they must move the account on to the next accelerated level of demand. Industry statistics have born this fact out for decades. Rule of thumb: The older the default becomes, the greater the probability of having to write-off the entire balance.
