July 15, 2024


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Debt Collection – Top 7 Tips to Handle Difficult Debtors and Recover Your Money

Debt Collection – Top 7 Tips to Handle Difficult Debtors and Recover Your Money

Every business has its share of slow-paying and non-paying customers. Bad debt is a problem for businesses of all sizes. If you are considering dealing with non-paying customers yourself, think again. It may make sense to hire a collection agency instead. They are skilled in debt collection strategies and legal protocol, so that you can leave the task to them with confidence.

Collection agencies decide upon the means of collecting debt according to the type of debtor. Some debtors do not need much persuasion while others do. For many debtors, just getting a letter from a collection agency is sufficient to make them pay the bills. However, some difficult debtors will do anything to avoid paying the debt.

Handling difficult debtors requires patience, skill and perseverance. Difficult debtors can be easily identified by their attitude. They can claim that they do not owe the creditor any money and try to wheedle themselves out of the situation. If they acknowledge the debt, they will make every excuse under the sky to convince you of their financial difficulties and inability to pay up.

Here are some tips on handling difficult debtors:

Contact the right person

Ensure that you are talking to the right person in the debtor’s company. Do not let the debtor refer you to other people to engage you in a fruitless merry-go-round.

Be firm

Make it clear that you expect payment for the products or service that the debtor has purchased from you. You have fulfilled your side of the contract by providing the services and goods and you have every right to expect payment for it.

Be professional

Though communicating with difficult debtors can be aggravating, as a professional you need to be keep your cool at all times. You must be patient and firm. Adopting a professional and impersonal attitude helps. Do not shout, even raise your voice, abuse or threaten the debtor, on any account.

Be focussed

The debtor may try to divert you from the problem on hand by discussing personal stories and making innumerable excuses. You must keep a tight rein on the conversation at all times, and bring it back to the purpose of the meeting – to collect payment or get a commitment for the payment.

Ask questions

Interrogate the debtor on the excuses made for not paying the debt. Asking lots of questions forces the debtor to come up with believable answers and in the barrage of stories, the truth can just slip out. The debtor usually hopes that the lies will be accepted without question. Persistent questioning makes debtors uncomfortable, as they have to keep coming up with more lies to support their excuses. Avoiding a repeat performance of the interrogation prompts debtors into settling the payment.

Report debtor to credit rating agencies

Sometimes, none of the above measures will show results. This happens when the debtor is exceptionally stubborn. Inform debtors that you are being forced to report them to a major credit rating agency. Reporting debtors to credit rating agencies will affect their chances of getting credit for up to 7 years. Sometimes, the threat works and the debtor may pay up. Otherwise, you must follow the warning with action and report the debtor to the credit bureau.


Litigation is the last resort. Warn the debtors of your intention of filing a lawsuit against them. If they do not heed the warning and pay up, make sure you follow through and file a lawsuit. This will make the debtor take collection attempts seriously and it will affirm your credibility.

Collecting debt from difficult debtors is an unpleasant and arduous task. However, it needs to be done. Patience, focus, persistence and professionalism are required to handle these debtors. Warnings must always be followed by action to ensure the debtor takes collection proceedings seriously and pays the debt.