Debt Collection Tips: Six Excuses from Debtors And How to Handle Them

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Debt Collection Tips: Six Excuses from Debtors And How to Handle Them

Debt Collection Tips: Six Excuses from Debtors And How to Handle Them
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Hi. My name is Adam, Debt Collection Expert and owner of ADC Legal Litigation Lawyers.

I don’t know one of my clients that actually likes doing debt collection, which is why they outsource to us I guess. However, internal credit controls can be put in place and some prevention strategies put in place early on could save you big dollars in the long run.

Once you find yourself in a situation where you are working with a debtor who has fallen behind on their payments, you are almost certain to hear at least one of the following excuses as to why they weren’t able to make their payments. One of the best things you can do in these situations is to have a response prepared for all of the most common excuses.

So here are the most common excuses we hear, along with some answers you can use:

1. I don’t have enough funds at the moment

One of the most common ways delinquent debtors will try to buy themselves some additional time is to simply say they do not have the funds to repay at the moment.

Answer: Ask them to fill in a financial statement. Have one ready and available online to send to them. Use our template if you like. If what they are saying is true, then they will not hesitate to fill in a financial statement. Then you can work with them to find out what they can afford to pay. If they refuse, advise them of the alternative, which is a court judgment, then a summon to appear before the court in order to reveal their assets and liabilities. Do they want to do it the easy way or the hard way?

2. I promise I will pay in two week’s time

Debtors who are repeat offenders will often make you promises about when they will be able to make payments. They also have a bad habit of not delivering on those promises.

Answer: Document the promise and ensure they stick to it. Get them to put it in writing, email will do. Keep detailed notes of each and every promise that was made and whether or not each promise was kept. Ring and email them just before it’s due and immediately after. If the first promise is broken, outsource immediately to a debt collector. If they break one promise, chances are they will break it again, so, in my opinion, no mercy can be shown once a promise is broken.

3. I will call you tomorrow

Perhaps the most frustrating type of delinquent debtor is the one who promised to call in the future, but never does. They then stop taking your calls altogether, once they work out the number coming up on their phone screen. They prefer to bury their heads in the sand, hoping their problems will just go away.

Answer:  Anyone who can’t be bothered to keep you posted on their situation clearly doesn’t have a strong desire to maintain a business relationship with you, so this type of debtor should immediately be moved through your collection process. As debt collectors, we would not be lenient in these situations.

4. I want copies of all documentation

Usually this is just another stalling tactic or loophole to get out of paying you. This is a very common stalling tactic.

Answer: Provide all documentation to your debtor in the first instance. As debt collectors, we always send all documentation to the debtor along with the first letter of demand. This way, they have no excuse. We also have that same documentation ready to go at a moment’s notice. This is why you need to put an emphasis on keeping all of your records up to date.

5. I will go bankrupt or liquidate my company if you continue to chase me

Another common tactic from delinquent debtors is to threaten to file bankruptcy or, if a company, to wind up that company.

Answer: This is clearly an excuse, since if it was true, they would have already done it by now. Ask them for their bankruptcy number or the name of the administrator that is handling the company wind up. Simple. Explain to them the consequences of bankruptcy and point out the downsides. This will hopefully dissuade them and also show them that you know your business.

6. The accounts person is not in, I will pass on a message

Passing the buck onto another person within the debtor’s business or company is very common. This is especially common in larger organisations, simply because there are many more people to pass the buck onto.

Answer:  – Be prepared to challenge the situation and ask yourself of the importance of this person in the payment process. A company Director or partner in the business should be perfectly able to forward payment if the person you are dealing with is unable to help. Go directly to the top. Find out who the owner or managing director is and ring them. You can check their website, ASIC or even Linkedin for this information.


ADC Legal Litigation Lawyers is a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal.





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