Growing up, I would often hear my parents talk about the financial health of their business. Although the conversations mostly centered around its success, there were occasions when they discussed some of the problems. Specifically, clients that owed them money. It was from these conversations that I learned the hardest part of owning a business, debt collections.
Debt collection is a tough subject to address as a business owner. Many choose not to pursue collecting on a debt because they believe the person has no assets or they do not want to deal with the headaches associated with collections. I see the same agony in my clients faces today as I did in my parents faces back then. It was in those conversations where I would hear the sage advice “you can’t squeeze blood from a turnip”. Although odd, it makes sense in terms of deciding whether to pursue collecting on a past due debt.
If a debtor has no assets it may be an unwise business decision to pursue collections. In many instances, however, just because a person does not have any assets now does not mean they will not have any in the future. The two mostly easily identifiable assets are property and employment. One of the easiest and most comprehensive ways of determining this is to conduct an asset search at the outset of a case.
I have found that success in the collections industry requires diplomacy, hard work, and thoroughly researching the assets of a person. By providing my clients with the most information up front, they are able to make an informed decision whether to proceed with collections or write the debt off….because you know you can’t “squeeze blood out of a turnip”.