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21 Oct
11:07

Important facts about debt and debt collection

Debt is the money taken as loan by a person from another or a company. It has to be paid back at a certain time. The time depends upon the owner and customer.

The definition of debt collection

Debt collection is the process of collecting money owed by people. It is also referred to as debt recovery.

Who is a debt collector?

A debt collector is a person who collects or recovers money of their customers owed by people. They work in debt collection agencies and work through that.

Process to collect debt

Collecting debts is a time taking process. Sometimes it can be a headache too, if your customer is not punctual.

There are certain ways by which you can collect your debt. They are as follows.

If your first payment is not made on time, contact your customer in a nice way and remind them about the payments. You can contact them through call, text or email. Maybe your customer was busy with something else and it slipped out of his mind to make the payments. A quick reminder would be okay. Text or email them all the details related to payments, so your customer would quickly pay you.

If the payment continues to become overdue, contact your customer again to remind them. Maybe after this they will be more punctual.

If the late payments or no responds still continue, meet your customer and talk to him directly. You are not supposed to harass or humiliate your customer at all. Meeting in person with your customer will be easy for both and will clear things a bit. Also it will establish a relationship between you and your customer making future payments easier.

If you have done all the things described above and all your efforts went down the drain, then it is time to send a formal letter of demand. This will be the last time you will be contacting your client yourself. After you send a formal letter of demand, things could get heat up between you and your client.

After all these efforts, if the customer still does not make the payments or respond to your letter of demand, then you can use legal debt recovery method. In this method, a statement is sent to the customer by the Court. The customer has to answer the court within 28 days of the statement.

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