IDENTIFYING POTENTIAL BAD DEBTS

Want to keep your bad debts to a minimum and have the best chances for recovery? Identify bad debts early! According to the International Association of Commercial Collectors (IACC) and other commercial collection groups, here's what to look for when identifying people who may create bad debts:

• Habitually slow in paying
• Financially immature
• Irresponsible about employment, usually irresponsible about family obligations and unavoidably involved in debt
• Incapable of handling own problems
• Skips, runs away from debts
• Deliberately buys with no intention to pay (credit criminal)
• Tries to reduce debt through unfair complaints

Add to this list the people who lose their jobs through no fault of their own and those who have unexpected financial reverses. In most cases, such people will voluntarily communicate with you and arrange for future settlement. Give these people a break — you owe them leniency.

When you have non-communicative, argumentative debtors, it's time to consider a qualified collection agency to help you collect a good portion of the bad debt. Bottom line — when you identify a potential bad debt, you should act promptly and decisively. Remember, the more time debtors get, the less they pay.

Extending Credit

Reducing Bad Debts

Recognizing the Delinquent Debtor