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Effective personal debt collection strategies in Massachusetts
Collecting a personal debt in Massachusetts is not the same thing as recovering a commercial debt; the fact that the debtors, in most cases, are family members or friends makes personal debt recovery quite sensitive. With a business debt, you can afford to sever your relationship with a client who doesn’t fulfill their financial obligations in time. On the contrary, recovering a personal debt is almost as important as keeping the relationship with the debtor intact.
With that said, it’s not advisable to enlist services of a debt collector immediately the debtor misses the deadline. Instead, you should first try the remedies discussed below.
Be calm and polite
It is easy to lose your temper when someone has broken their promises and inconvenienced you. Nevertheless, when collecting your personal debts, you need to keep your cool. Sometimes, the debtor defaults on the debt unwillingly. If you lash out at them, you will only raise the tension levels without necessarily increasing the chances of getting paid. If you are polite and respectful, tension will be low, thus, creating a suitable environment for negotiations and reason.
Understand the debtor’s position
Before taking any further steps, it is essential to understand why the debtor defaulted. As earlier stated, the failure to pay isn’t always deliberate. It could be due to unprecedented losses or an emergency on the debtor’s side. Understanding the debtor’s position will help you adjust the payment terms and period. It will also make you hold realistic expectations, thus, avoiding frustrations.
Explain your situation
Although it’s your money and you have a right to get it, making the debtor understand why you need the money pays off. Sometimes, people have money in their pockets but are reluctant to clear their debts because they assume the creditors don’t need the money at that moment. In the same way that you loaned them money because you empathized with their situation, the debtors will pay faster if they understand you need the money.
Remind the debtor and ask for updates
When it comes to collecting personal debts, you need to be courageous and frank. If the deadline is approaching and the debtor is not even mentioning the debt, remind them of the agreement. This will help you prevent the obvious excuse of “I forgot.”
Usually, the debtor will tell you how they plan to repay the debt when borrowing. Keep asking for updates regarding the repayment plan. For example, if the debtor promised to pay after selling off some of their property, keep asking them if they’ve found a buyer. If you sit and wait for the deadline day, you may be in for a big disappointment.
Use informal past due notices
If all the above remedies have been futile, it’s time to show your seriousness to the debtors, but don’t go formal right away. At this stage, the informal past due notices are enough to get the job done. They could be letters, emails, or text messages. Ensure you keep copies of the notices; they might come in handy if the matter ends up in court.
A good past-due notice should remind the debtors of the circumstances in which they borrowed the money and their initial promises to pay. Furthermore, when composing the past due notices, spell out of the specific dates and amounts agreed.
Strike a debt settlement agreement
The ultimate goal is to recover your debt while avoiding tedious legal battles and keeping your friends. With that in mind, it’s good to negotiate a settlement agreement before seeking legal remedies. A debt settlement agreement will be a new repayment plan that takes into account the debtor’s current financial situation. For example, after learning why the debtor was unable to honor their promises, you can extend the repayment period or ask them to pay in manageable installments.
Send a letter of demand
A letter of demand is a step up from informal past due notices. It’s a formal letter demanding that the debtor settles the outstanding debts. It portrays you as serious and notifies the debtor that you are considering taking legal action if they don’t pay. A letter of demand provides a schedule for repayment of the outstanding debt as well as a failing settlement.
When drafting a letter of demand, aim to be as specific as possible. Spell out the exact amounts, dates, and places involved. Also, remember to attach supporting documents. Keep a copy of the letter for future reference. A letter of demand is a critical document in the debt collection process. Therefore, you may consult a Massachusetts debt collection attorney to help you word the letter.
Call in a debt collection attorney
If you had not consulted a debt collection attorney when drafting a letter of demand, it’s now time to do so. This will help you get a conclusive solution to the matter. The attorney will advise you on the steps you need to take, help you prepare the necessary documents, as well as fight for you in court if necessary. Since every debt case is unique, you are more likely to get a favorable outcome when working with an accomplished Massachusetts debt collection attorney.
About Massachusetts Debt Collection Attorneys
We are a team of debt collection attorney with a collective experience of over 50 years. In these years, we have recovered hundreds of personal and commercial debts for our clients. One thing that sets us apart from the competition is that we don’t accept all cases that are brought to us. Instead, we analyze each case thoroughly before deciding whether to handle it. The last thing we’d want to do is to give our clients false hope.
Further, our pricing is flexible and transparent. In fact, most clients pay us only if we recover the debt. This gives our attorneys the motivation to be quick and aggressive. We also give regular updates to our clients throughout the debt recovery process. Contact us today for speedy debt recovery.