What are the Best Tips for Bad Debt Collection?

Felicia Dye
Felicia Dye
Businessman with a briefcase
Businessman with a briefcase

People fail to repay their debts in a timely fashion for a number of reasons. For those who make loans or extend credit, being owed can be stressful and it can be problematic. The difficulty associated with bad debt collection can aggravate the matter, but there are some things that creditors can do to increase their chances of payment. These include making personal contact, being professional, and employing a debt collection attorney.

It is always best to put forth all the necessary effort to speak with the debtor. Spouses or household members may listen and they may promise to deliver the message, but they generally cannot or will not make payment commitments. If the debtor is unavailable, it is best to ask for the name of the person who is reached. Then, ask for the best time to reach the debtor. Finally, use the person’s name to confirm the information by saying something such as, “Okay, Martha, since you said that George will be home on Wednesday after five, I will call him then.”

Personal contact can be much more effective for bad debt collection than impersonal measures such as letters or messages. One reason for this is because talking to people provides assurance that the debtor is aware of the concern and the attempts to collect. Messages may be erased or left unchecked for extended periods of time. Letters may get lost or be discarded without being read.

Another reason that personal contact can be effective for bad debt collection is that many people, even those with bad debt, are honest. If they say they will do something, it weighs on their conscience if they do not do it. This means that getting a commitment for payment or partial payment can result in a person feeling obligated to act on those words.

Everyone who has bad debt is not honest, however. Some people may say anything to end the conversation. In some instances, although they owe, people will become defensive and rude. It is best to always maintain a professional attitude. Otherwise, the debtor may become irritated and decide not to pay as a form of retaliation for the lack of courtesy.

Although professionalism should be exercised at all times, it is important to communicate the need for payment. Doing this should involve the debtor being told how non-payment will affect him. Individuals may not feel sympathy for creditors or they may believe that a company has so much money that outstanding balances have no effects. It can be much more motivating, however, if debtors are informed of the personal consequences they will suffer. Collectors should, however, be careful to prevent delivering this information in a way that makes it seem as though they are making threats.

In some instances, creditors cannot successfully handle bad debt collection on their own. When substantial efforts have been made and adequate opportunity to pay has been given, it may be necessary to hire a debt collection attorney. If the amount outstanding is not worth getting an attorney, it may still be effective to tell the debtor that this will be your next step.

Discussion Comments


I started out in the debt collections department at work. I had to learn about the fair debt collection practices act before I even started my first day on the actual job. There were a lot of things I didn't know about legal debt collecting, like the hours of the day I could call debtors and the tactics I could use to get the debtor's attention. For example, I could threaten to take legal action, but I couldn't tell the debtor to expect a call from our debt collection attorney next week.

I can't say it was an enjoyable way to earn a living, but my boss told me I should treat the phone calls as just part of the job. I had to learn to let people vent their anger or frustration before pushing them on a commitment to repay their debt. I couldn't take it personally.


I've been on the receiving end of bad debt collection calls, and I'd have to say most of the collection agents were at least empathetic to my financial situation. They had an unpleasant job to do, and I couldn't deny that I owed the money. The only conversation left was what I planned to do about repaying the debt.

I think debt collecting goes much better when the debtor doesn't feel like a complete deadbeat. The debt collector should remember the person on the other end of the line is a human being who's fallen on hard times.

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