Excuses that your debtors may give you… and some replies to their excuses!
The funny thing is I’ve been working as a debt collector for many years and, during this time, I thought I had heard all the excuses. Still, I thought there would be more. So I undertook to ask 100 participants during the course to write down their list of excuses. I was surprised to see that the same excuses came up over and over.
The following is the list of excuses and some replies that will give you confidence in answering the reasons debtors say they can’t pay.
Click on the questions below to view the answers.
A: How much do they owe you?
A: How long have they owed you the funds for?
A: What steps are you taking to recover your money from them?
A: Give me their number and I will go and pick up our payment from them.
A: Our contract is with you. If you have a debtor problem then you should see about obtaining help in recovering your debts. Making us wait is not acceptable. Our terms and conditions for payment are within 7 days (or state whatever your terms are).
A: So are you saying that without ABC Trades’ payment your company is not making a cent, or isn’t being paid from any other debtor? If so then are you aware it is illegal to trade whilst insolvent?
This excuse is given by a person who only wants to pay once he has the funds, and not before. He does not like putting himself out financially. Your job is to make him pay you first.
A: How are you living then? Are you still taking a salary from your business?
A: How are you living then? Is your wife working? Are you on the dole?
A: How long have you been in this situation? (This will determine if they purchased your item whilst unable to pay, therefore aware of what their moral obligation was all along).
A: Can you sell or trade anything to match the amount of money that you owe?
A: Can you or have you applied for a loan? Will you obtain a cash advance on your credit cards, or a line of credit loan?
A: Will you supply to us a list of assets that you own so that we can determine through the courts the sale of said goods in order to pay this debt?
This can be a tricky one, as they may have never intended to pay you. Again be firm about your terms and conditions and continue to negotiate until you have a payment resolution. A realistic but rarely used form of payment could be to barter work or goods in full settlement of payment. They may have something to trade, or be willing to do some work in exchange for a cash payment.
A: Have you actually gone bankrupt or are you thinking of going bankrupt? Have you gone part 9, part 10, part X, creditor’s petition? Was this voluntary or not? (There are so many forms of bankruptcy and can be very confusing)
A: What do you expect will be the payment on your bankruptcy and will your assets be sold to recover the debts? If so, what percentage are you offering your creditors?
A: Are you bankrupt or has the company you own gone into liquidation? (If the company has gone into liquidation and you have a personal guarantee then you can continue to pursue funds from the directors personally)
A: When are we likely to receive your notice of bankruptcy and which company should we now negotiate with?
Be careful here, as I have seen cases where subjects have told creditors that they were in the middle of going bankrupt and upon investigation they have not actually gone bankrupt at all. Often just saying so is enough to have a creditor write off a debt because they feel they are going to waste their time. Remember that if they are legitimate they will get a bankruptcy number, date and person who is a case manager. For your information, a bankruptcy number looks like this 1479/05. To break it down it means that they are the 1479th person to go bankrupt in the year 2005.
IMPORTANT NOTE: If you feel the bankruptcy is NOT justified, you can lodge a dispute with the bankruptcy board. This may mean if a person has had improvements done on their car or purchased items and then within a short time goes bankrupt, there is a good case to argue that they may have never intended to pay you but to declare bankruptcy to avoid payment.
A: When did they pass away?
A: Who is the executor and where can I contact them?
A: Who is now looking after the business, the account, and the payment?
If it was only a few days ago that they passed, it may help to send a note and then wait a few weeks prior to following up for payment. Don’t just write the debt off, though.
A: Ok may I ask what the cheque number was?
A: What date was the cheque sent and for how much exactly?
A: What address was the cheque posted to?
A: I tell you what, the cheque is obviously lost in the mail, so can I ask that you cancel that particular cheque with your bank and I will organise to pick up another replacement cheque today. (How they answer is going to determine if they had in fact sent the first cheque in the first place. If they do cancel the cheque, then be careful that they do not charge you with a cheque cancellation fee. I have seen some business try to do this before).
A: I will come and pick up a payment now, OR please phone bank it to me,
– “Oh I don’t have the cash in my account any more”. I am sorry, are you saying that even if the original cheque comes in the mail today and I bank it, then there is NO money so therefore the cheque will dishonour?
A: Mr Smith, I put it to you that you have never mentioned a problem before and since there is no warranty on goods that have not been paid for, then I suggest that you pay your account in full and then we can arrange to meet and address your alleged problem.
A: Are you aware that we do not have to take legal action for recovery of money? We can issue proceedings to have our goods and material returned and just have the labour fee pursued through the courts. This means, Mr Smith, that we will pull down the pergola that we installed. This will be done with the courts permission… (this should be enough to make them see sense)
A: Mr Smith, I have kept a detailed diary of dates I have called, letters I have sent and conversations we have had. All of which I will submit to the courts to show that not once have you mentioned any problems prior to this date
(Even if you haven’t then bluff them into thinking you do)
A: Our terms and conditions do state that you have only 7 days to lodge a fault. Time is well and truly past this and you have not mentioned it before. I tell you, pay the account and we will come out and fix it accordingly.
This is good if both parties are disputing the workmanship. You’re saying good work was done but the debtor is saying they’re not satisfied.
A: Sir, I propose that the money be held in a trust with a third party such as the local solicitor and that once the work is deemed to be of industry standard then the solicitor can release the payment.
A: Please can you give me your address – DO NOT tell them the address, ask them to give you the address. This way, if they have given a false address or moved then you can get their details updated.
A; Give me your e-mail address and I will send it right now.
A; Give me your fax number and I will send it.
A: If the money is big enough – OK I will drop off an invoice today and organise to pick up the payment.
A: (If after…) I am so sorry, what are you doing to look for work?
A: Can you borrow the money from another family member of friend.
A: Would you like to start a terms agreement, and since you are on the dole have the money deducted from Centrepay?
A: Is your wife working?
Again, think of bartering, or in some instances can they return the goods.
A: Do you know that if you go to your bank they will give you a book of 10 cheques and hand right your bank account details on them, they are just the same as printed ones and can be used NOW.
A: I am sorry if you misunderstood, but we quite clearly informed you of the cost and you agreed to this prior to the commencement.
A: We left the total amount due on the day of the work – you did not dispute this then, why?
A: Do you have the quote or the proposal in front of you with the written amount that you feel we agreed upon? (If they do and you have not done extra work at their suggestions or their agreement then you will have to accept the original quote).
A: This amount is our standard fee for the service provided.
A: Who did you speak with and did they agree in writing?
A: Do you know where the partner is? – Perhaps we can send a copy of the invoice to them.
(It makes no difference that they are dissolving the both partners are responsible and you should not feel guilty or delay payment because they had a falling out)
A: When did your spouse leave you? (It may have been ages ago)
A: I can send your partner a copy of the invoice but you both are still responsible for the payment.
A: May I have all contact information on your spouse, their new home, phone and work details?
A: Feed back the initial call if you can remember it.
A: Supply the order form.
A: Where are the products now?
A: Why did you not dispute it when the work was being done?
A: Why did you not phone us when we have continued to supply the service to you? Why didn’t you advise us that you had cancelled this?
A: May I ask if you haven’t been using the service, then who in your home has? (Especially on Internet accounts)
“My children may have”
A: In that case, you are still responsible for the account. We can halt services as of today but you are due payment up until today.
A: You claim the cheque was presented, but I am sorry but I cannot locate that payment in our system. May I ask that you to contact your bank and proceed to obtain the details of if it? Has it been presented? Then if so by whom? Now if it has gone into our account then I will reimburse you with the cost of this exercise.
A: Can you tell me how it was paid and to whom? If you state it was paid to our shop/staff/worker, then how was it paid? If it was cash did you get a receipt off them? We always give a receipt.
A: I am sorry but unless you can prove that we have not only received it but it has been accepted by us and placed in our account, then it is deemed unpaid and we need to look at this repayment from you. If you cannot prove that we have received, then in court the law works on the proof of payment. No court will accept I sent a cheque or I wrote a cheque and it’s not up to me to find it. I am sorry but we need to see it proved as paid.
A: Why can you not have a cheque ready for him to sign then when he returns?
A: OK give me their home details or mobile number and I will organise to meet them with an unsigned cheque, but of course with all the other details written on it.
A: I will be at the office tomorrow morning at opening time to collect the cheque. I suggest that you courier the cheque to where he is and organise payment.
A: Do you have the details of when it was paid then, may I have the contact details of your bookkeeper or accountant?
A: Can I ask you to hold on and I will get on the phone in a “three way conversation” so that you can make sure the accountant knows that we have spoken and that you state he is to pay us? (By organising a three-way phone call, you stop them playing on off the other. If they are genuine, they will be happy to oblige. Now how to do this: recall 2 on a standard phone is call waiting, recall or flash 3 gets you a second line. All you do is dial the number, wait till someone answers, then hit recall 3 and then you are all on the phone together.
Recall 3 was the best method of organising payment as when you have both parties on the line one could not play off the other or blame the other.
A: Can you barter any work or goods to us?
A: How long has this bad time being going on?
A: Do you have a plan to trade out of a problem or do you think you will go bankrupt?
A: Can you refund some of the goods we have sold?
A: Would you consider entering into a terms agreement with our business so that we can organise regular monthly payments at this time? Perhaps we can look again at your situation within two months.
A: No, our first service is as per our charges, but if you continue with us we would be happy to offer the 10th service for free/at a discount.
A: Is this offer in writing or was it verbalised? If so, by whom?
A: I am sorry but it is a due amount. So how would you be paying this today? Cash or cheque?
A: If you cannot do payments or cheques for a while, how are your staff getting paid and what if there was an emergency or COD order that you must pay up front for?
A: Do you know that you can go to your bank and they will set up 10 cheques for you now that can tide you over until the new system is in place/you are set up in your office?
Visit the premises at a very early time so that they should be there.
Visit their home.
Get a third party to call. Then when the debtor comes to the phone, pass it to you.
See about looking for them at home, if they’re the owner of the business.
Tell them to interrupt the meeting and that you have left messages time and time again and that you are willing and able to hold on the phone line until the person comes to the phone.
Get a third party to call and ask for the debtor as if was a friend, “Oh hello, is Jim there?” “Yes, this is Sharyn, no it is a private call, thanks. Can you grab him for me?” Curiosity gets the better often here.
Explain that you are on your way to their office to see them.
Be firm and remain consistent and strong, but not rude, just persistent. After all, the squeaking wheel gets oiled and the debtor is probably used to people just constantly leaving message after message after message.
Advise the debtor that the third party is wrongfully in possession of your goods, which remain your property until the account is paid in full, that if the account is NOT paid then you will proceed with a summons for the removal of the goods from the third parties premises. This will be at a cost to debtor. When you fill in a summons instead of asking for money ask for return of goods or the value of goods.
The plaintiff claims the defendant is wrongfully in possession of the plaintiffs goods, namely… (here fully describe goods and an itemized value for each item, or attach sheet if sufficient space)… The plaintiff claims the return of goods, or in alternative, the value of the goods and the costs of this action.
If you explain to the debtor that this could result in litigation, from the third party to the debtor, as the third party has already paid for the items, then they will more often than not pay you so they can avoid any loss of future work if they are contractors or avoid involvement in further litigation and having to explain where they spent the money that was supposed to go to YOU.
