Trying To Collect Money From People Who Claim They Have None? Five Money Sources Your Debtors Can Use To Pay Off Old Bills
Trying to convince a client to pay an old bill can be frustrating for both you and the person who is in debt. In many cases, people simply need help knowing where to look for the money. To that end, consider giving your clients a bit of friendly advice.
Here are five places people who may not have money in their pockets or in their banks may be able to find some extra cash:
1. Home Equity
When did the debtor you are approaching buy his or her home? If he or she has owned it for years or decades, there may be equity in it, and if the debtor liquidates that equity, he or she can pay off the bill he or she owes you as well as his or her other debts. Best of all, since the loan has the debtor’s house as collateral, the debtor is likely to enjoy a lower interest rate than he or she is currently facing on credit cards or other debts.
Many people believe that you can only cash out your superannuation when you reach a certain age. However, in certain situations, you can actually cash it out early. If the client who owes you money is experiencing severe hardship due to financial issues, he or she may be able to cash out his or her account through the early release program and use some of that money to repay you.
3. Whole Life Insurance
Although it is no longer sold in Australia, whole life insurance was popular during the 1970s and 80s, and if your client is older, he or she may have one of these policies. With a whole life insurance policy, you can access some of its value, and you don’t even have to die first.
Unfortunately, term life insurance, which is currently common, does not have the feature where you can cash it out. Ask your client what kind of life insurance policy he or she has.
4. Payday Loans
In other cases, you may be able to convince your clients or debtors to take out a temporary loan to pay off their debts to you. Payday loans, because they do not require a credit check, can be used for this purpose.
5. Friends and Family
Finally, if you can convince your debtors that they need to pay their bill as soon as possible, you may be able to convince them to turn to friends and family. You can convince them to borrow the money from family or to have their family cosign a loan.
Convincing someone to take out a new loan against their home or to talk to their grandma about a loan can be difficult. It is essentially an art, and if you find it challenging, you may want to consider outsourcing your debt collection efforts to a professional third-party debt collection agency, like Smart Collect.Read More