Cash is King, Part 4: Six steps to an individual payment agreement
When debtors fail to pay their outstanding debts, this can put companies in a dicey situation. Special solutions must then be sought. An agreement is possible with the following points.
The debtor, who ordered equipment for the finishing of roll materials such as paper and metal foils (in the Part 1 of this continuation story), but did not pay the invoice despite a reminder, refuses to make the corresponding payment to the creditor. The creditor transfers the case to the collection agency by way of assignment of the claim, whereupon the collection agency contacts the debtor with the aim of achieving a viable result.
From contact to acknowledgement of debt in six steps
- The debtor is in arrears. He promises the collection company that he is also interested in a solution and asks it to give him the creditor's phone number. "But such contact is no longer necessary," says Jason Glanzmann, director of serviced portfolios at Intrum. "As the creditor's representative, we are now the point of contact. We mediate between the debtor and the creditor. The procedure is agreed upon in advance."
- How can I then avert the claim against me, the debtor asks himself. The answer: after the debt has been handed over, the Collection service provider a letter is sent to the debtor. There it is stated that the debtor has not paid for the said goods and the creditor requests him to pay the outstanding amount. All payment options are noted in this letter:
A) He may pay the amount due either with the payment slip enclosed in the letter.
B) Or he can use the bank details indicated in the footer via e-banking.
C) In addition, the debtor has the option in "Intrum Web" to pay the amount with his credit card. - The debtor is unable to pay the debt immediately and at once. Therefore, he proposes to make an individual payment agreement. "We offer a hand for solutions. If the financial circumstances do not permit payment of the entire invoice amount, we also consider installment payments," emphasizes Jason Glanzmann.
- At present, the debtor is actually not in a position to settle the total claim with a single payment - only the Installment he sees as a possible way. To express this wish, the defaulting debtor must contact the collection agency - either by phone or via an online form. He should then state by when he can pay the debt - in full or even partially in installments.
- The debt collection company agrees, as payment by installments is still a sensible way for the creditor to receive the outstanding amount. But the debtor is puzzled and complains why he now has to pay an installment surcharge. "The reason is clear: An installment payment means payment relief for the debtor, but additional expense for us. We have to charge the debtor for this additional effort. In return, he receives a longer payment period than with a one-time payment, so that payment is also realistic," Jason Glanzmann emphasizes.
- To ensure that these individual payment arrangements are in writing, the debtor should sign a debt acknowledgement. "A debt acknowledgement serves to confirm our specific agreement. In it, the debtor affirms that he accepts the claim and the renegotiated payment modalities," Jason Glanzmann elaborates.
Jason Glanzmann, director of serviced portfolios at Intrum. (Image: zVg / Intrum)
Who is the polluter and who pays the costs?
You will find out whether the debtor settles the outstanding claims and what course the aggrieved company takes in the further course of this continuation story. The fifth and next part deals with the topic of "costs and polluter pays justice".
Contact for more information: Intrum Inc, sales.ch@intrum.ch, +41 44 806 85 57, www.intrum.ch
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