Working 30- 60 Days Past Due
Things are getting hairy if your customers are 30-59 days past due. Your payment plans might be a structured to ensure the customer doesn’t fall off your books due to charge off or legal action. The name of the game is to keep the customer and have them pay you money.
An easy repayment strategy to implement would be dividing your delinquency over a multiple payments and spreading that amount over the course of a month. What you’re trying to achieve is good will towards the customer while at the same time train the customer to make their payments on time and in the contractual amount. .
For example, if your delinquency is $500, and your regular scheduled payment is $250, consider two to three payments of $250 dollars for your repayment plan. Think it through though… always make sure your arrangements are no less than the regular scheduled payments amount.
If you’re not thinking in this direction, by 60 days of delinquency, you are setting your customer up to have to make steep payments in the future. So make sure you offer your extensions quick because the customer will not like having to pay an enormous amount of money. That said, if you don’t catch them quickly and place them on arrangements it’s a good chance the account will be lost.
I know that might be tough to swallow, but this is a proactive measure that will benefit you in the long run.
Working 60- 80 Days Past Due
This is a period where the phone calls begin to get annoying. You know that things are rough and your customer is starting to avoid your calls altogether. And believe me, as a collector you know it. And they’re not happy that they got to call you back.
At this stage, as collectors we’re a little more aggressive about the cash. Back to you though; if you’re within or 90 days past due you now need to know more than what the status of your loan is.
- You’re now at a point where you need to know legal terminology and although that sucks, you have to deal with it. The ninety day point is where many customers face a reality check and either comply or deny.
- Customers that reach this stage are usually in despair and have had a life changing event occur and it’s difficult for the agents to work with these people. Some folks pay, some folks don’t even bother to pick up the phone.
If you’ve reached stage do some soul searching. Seriously, this is the moment to start creating a warrant in debt if the customer isn’t paying. This is the moment where you should be thinking about the objective fact… your customer might be trying to steal from your organization.
90- 120 Days Past Due
This is the “oh, shit” moment. Ninety days is rough, but if you’re on the verge of 120 days past due by the second to the last business day of the month then you need to make a dash for some cash. Why? Because you’re near charge off!
A charge off is when a personal installment loan (or any type of credit) is considered an un-collectible debt and the loan is written off the lender’s books. The financial lending institution has no choice in the matter because the lender is not allowed to inflate their assets when reporting their income at the end of the year.
If you do not make the minimum payment required by the second to the last business day of the month when your account reaches 120 days past due, your account will charge off, no questions asked. And if you’re not putting this together yet, a charge off isn’t good— it means you defaulted on a liability.
There are many people that wish they never let this moment come. They become extremely pissed off at the lender, deny responsibility for the loan, and tell the collectors that they aren’t going to pay– or even worse, they never answer the phone. The next stage of collections for a personal loan is recoveries and the infamous i9 credit rating is in process. And an i9 is considered almost as bad as bankruptcy.
120 Days Past Due and Beyond
If you’ve reached this stage you no longer have any options. You either settle with the lender or face legal judgment. You will now be screwed if you have not sought legal advice or (and I hate to even say it) a third party debt relations manager.
- Collection parties want the entire amount due now!
- You have received an i9 on your credit score and it will not leave you CBR for seven years from the time you pay off the balance due or settle the amount owed.
- The hunt is on and the skip tools used to find you are advanced. You cannot hide. Even if you think you can, you cannot.
- Garnished wages are almost inevitable