Debt Collecting While Navigating this Economic Pandemonium
For lenders, figuring out the best debt collecting strategy in these uncertain times requires a unique approach. In normal times, repaying a loan is a simple, matter of fact procedure. A debtor is either repaying on time or breaching the loan agreement. However, just as if a loan recipient were hurt by a tornado or hurricane, difficult times call for different measures. It is better to assume the debtor is intending on returning the money, eventually. Obviously, debt collection should be done with the assumption that all debtors want to resolve their debt. The goal should be striving for a solution that works for both parties involved.
Feeling the Pressure
The problem is of course the combination of money and the unknown. The only thing scarier than being sick is not knowing if you can weather the storm financially. This outlook makes people on both sides defensive. Already debt collectors are being describes as menacing with articles coming out about loan recipients being threatened by loan sharks. On the other hand, debt collectors are dealing with debtors who are not meeting loan payments, though their online stores are still making money. This escalation is the direct effect of the stress caused by the pandemic as each side feels victimized.
New Problems, New Solutions
Unfortunately, the real work of debt collectors these days is figuring if the loan is not being returned due to the pandemic or not. Many debtors cite the crisis as the reason for avoiding payments without providing any real evidence that they have been hurt. Some of these debtors’ shops are still going strong and even those who are not operating at full capacity can still meet their payments. Another issue is that some companies are starting up new endeavors, so now they have two companies instead of one. This means the new company might not be responsible for the old company’s debt. Therefore, the need for debt collectors to show empathy during these times is hindered by the fact that many try to take advantage of this unique situation. While many are truly struggling, it is hard to differentiate between the cases based on trust or words alone.
Luckily, thanks to advanced technology, even in the chaos and uncertainty, there is a way out. There is a way to figure out what the real debtor’s financial situation is, without treating them like a criminal or potential scammer. Leading computer systems, based on ML and AI, can offer a bigger picture for the loan collector. One that is accurate and comprehensive. These applied science methods can do more than grant access to the debtor’s full financial status. Using these analytical tools, a debt collector can decide how to approach the loan recipient. Even setting up a new, befitting payment plan is easier through these structures. This way, not only is the debtor given the opportunity to repay on his own terms, but the debt collector is ensured of getting his money back.