Some Strategies For Debt collection

by Sathya
(Theni, Tamil Nadu, India)

The basic technique is to appeal to debtor's conscience. Nobody wants to be a willful defaulter. Physical intimidation, threatening calls, issuing notices wont help.

Ahimsa (Sanskrit, meaning do no harm) as advocated by Gandhi is the best solution.
You must defy the debtor. You must visit him again and again, like the Mahmud of Ghazni, who tirelessly raided northern India; up to 17 times.

So, as the name implies; relentless pursuit.
Nobody likes a lawman knocking on people's homes. Litigation will take years and you will get fed up with the prolonging lawsuits. Nothing in law the says that you cannot, politely, call up on debtor's doors.

Visit him, call him again and again, appeal to his honesty, integrity. Be lenient in hard times, when the income is low or when he is jobless. Choking him on those times will only lead him to take a flight, or run away.

Coax him, cajole him, even offer him benefits like: interest write-off, reduced rates and so on. The main idea is to make him pay, by appealing to his conscience!

Institutions sometimes offer OTS, or one time settlement plans to debtors. In this process, the debtor is offered a fixed amount to settle, after various discussions and deliberations, with a stipulated time frame; say a six month period.

This is particularly useful, when the asset involved becomes an NPA (Non Performing Asset) and when the loan becomes dubious and doubtful debt.