As a creditors' rights firm it is easy to get caught up in the numbers, the principal amount owed, accrued interest, court costs, attorney fees, final judgments, post judgment interest, terms we use every day in this industry, and they matter but they do not tell the whole story. Behind those numbers is a person who defaulted on a debt.
As a debt collection firm should we also be considering why the debtor defaulted on the debt in the first place? The short answer is yes! Most debtors don’t intentionally default on their debts, it is usually due to an unexpected financial hardship, the loss of a job, a medical crisis, divorce, or even the death of a spouse or loved one resulting in a reduction of household income.
Understanding the “why” behind a default can lead to compassionate collecting. When we take into consideration a debtor’s current financial circumstances, we can structure a settlement plan that works within their budget to get the account resolved for our client. At the end of the day, I think we can all agree, the numbers matter but so do the debtors behind the numbers.
4 Things to Keep in Mind
- Every account has a story. Financial hardship is often the result of circumstances beyond a person's control.
- Listen before you negotiate. Understanding a debtor's situation can lead to more realistic repayment solutions.
- Flexibility can improve outcomes. Payment arrangements that fit a debtor's budget often increase the likelihood of successful resolution.
- Professionalism builds trust. Treating every debtor with dignity reflects well on your organization and supports long-term client relationships.
If you have questions on this topic, or would like to learn more about Weltman’s Consumer Collections Solutions, feel free to connect with Sarasota Attorney Sara Jones at any time.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
