5 TRAITS ANY DEBT
COLLECTOR SHOULD MASTER
1. COMMUNICATION – is one of the keys to
becoming a successful debt collector. When
you are able to effectively communicate the
debt collection message to your clients, you
put yourselves in a position to resolve
differences while you build a trust
relationship between you and them.
2. NEGOTIATION – a successful debt collector
is
a good negotiator. Through negotiations you
are able to resolve problems, since most
problems arise from unmet needs. Therefore
the solutions you suggest must have your
clients needs at heart. 5
3. EMPATHY – has more to do with logic than
feelings. A successful debt collector must
have the ability to view the situation from the
clients perspective. And this process is
logical in that in order to understand your
clients position, you need to walk away from
your own. 6
4. GOAL ORIENTATED – is the degree to which
a WHAT IS DELINQUENT?
person focuses on what needs to be done
and the end results of their efforts. Strong
goal orientation focuses more on the end
results that your actions will accomplish
instead of the efforts necessary to bring
about the desired end results and how those
end results will affect you in the end. 7
5. PERSISTENCE – And finally, a successful
debt collector knows and understands that
there is no such thing as over-night success.
To be successful you will need to define
some goals and be persistent in carrying
them out.
WHAT IS DELINQUENT?
Delinquent describes something or someone
who
fails to accomplish that which is required by
law,
duty, or contractual agreement, such as the
failure to make a required payment or
perform a
particular action. It refers to a situation where
a
borrower is late or overdue on a payment.
When
this happens, collection system along with the
penalties and charges take place.
A debt becomes delinquent when: ▸ Payment
is not made by the due date or the
end of the “grace period” as established in a
loan or repayment agreement, in the case of a
debt being paid in installments. The date of
delinquency is the payment due date.
A debt becomes delinquent when: ▸ Payment
is not made by the due date specified in the
initial billing notice, in the case of
administrative debts such as fines, fees,
penalties, and overpayments. The due date is
usually 30 days after the agency mailed the
notice. The date of delinquency is the date
the agency mailed or delivered the billing
notice.
VARIOUS TYPES OF
DELINQUENT DEBTORS
1. The negligent
2. Debtor boasts of
being well connected
with politicians and
people in power
3. Heavily leveraged
debtor
4. Seasonal delinquent 4. Preserve goodwill
5. Debtor who Even though the customer may be
deliberately commits experiencing some difficulty in meeting
fraud payments, it does not preclude them from
6. Chronically slow becoming a good customer in the future.
7. Wittingly late Therefore, it is important to preserve goodwill
8. Stretcher while pressing for collection. This requires not
9. Tightrope walker only tact, but knowledge of the customer and
10. Vanishing debtor industry.

PRINCIPLES OF COLLECTION TOOLS AND AIDS IN COLLECTION

1. Collect the money
The primary job of the person responsible
for collections is to collect the money as close
to
the terms of the obligation as possible. There
should never be any doubt as to why the
individual is engaged in this particular task.
The
debtor has an obligation to pay within the
terms
of the agreement.
2. Systematic follow-up
After the initial contact with the
delinquent customer, it is important to keep
additional contacts on a strict schedule. If the
collector, for example, is told that a check will
be
mailed in a few days, it should be noted. If the
check is not received at the promised time, a
follow-up is essential, otherwise the
collection
effort will become ineffective.
3. Discussing the account
Once the collector gets the customer to
talk about the delinquent account, the
collector
is well on the way to receiving payment. That
is
why emphasis is placed on inviting the debtor
to
talk. The objective of the discussion is to get
the
debtor's explanation of the delinquency.
1. STATEMENT OF ACCOUNT
 It must request payment
 Inform the debtor how much he
owes
 Itemize the loan or debt
 Easy to understand
 States due date, interest rates
and penalty charges
2. COLLECTION LETTERS
 It must be concise and direct to the
point
 Should give the debtor a chance to state
his repayment problems
 Should request the debtor to give his
repayment plan at the same time his
commitment to comply with it
 It should contain details of the loan
 It should mention any penalty under the
law if the loan remains unpaid.
3. TELEPHONE OR CELL PHONE CALLS
 Plan your calls and strategize on how to
persuade the
debtor to pay
 Speak clearly and talk at the debtor’s
language level
 Pay attention to the debtor’s story and
do not interrupt
 Persuade the debtor to commit to a
time-bounded
repayment plan
 Remember to persuade the debtor to do
 the next step
in the process of loan collection.

BASIC
COLLECTION
APPROACHES
BASIC COLLECTION APPROACHES
1. Educate the debtor of the credit policies
and
procedures of the creditor. For example:
penalty
charges will be imposed once payment is not
done
on time.
2. Firm persuasion done in the a friendly
atmosphere
3. Assist the debtor if he has repayment
problems with
the end in view of formulating a mutually
acceptable
repayment plan
4. Use coercion in collection under applicable
laws

WISE TIPS OF
COLLECTING
LOANS
WISE TIPS OF COLLECTING LOANS
1. Give the debtor a clear choice of action
2. Prefer a short repayment term to minimize
risks of
payment defaults
3. Identify the debtor’s vulnerability as a
persuasion
tool
4. Convince the debtor that settling the loan
amicably
is better than pursuing court litigation