Debt collection can be challenging when the debtor is not cooperating. The creditor-debtor relationship is successful when there is reliable communication and both parties observe their obligations.
What happens when a debtor who caused you problems in the past before they finally paid up wants to work with you again? Here is what you need to consider:
Understand they are a credit risk
People who refused to pay debts in the past are considered a credit risk. If you give them another loan, you don’t know if they will pay it back. If you supply goods to them, you may not be sure if they will pay, and so on. Thus, when a stubborn debtor asks if you can work together again, remember your experience with them and assess if you can go through it again. It’s okay to decline.
Take your time making the decision
When a debtor asks if they can work with you, it may help to take your time. You can politely inform them you can’t at the moment but can consider their request in the future. This way, if possible, you will have adequate time to analyze how they work with other creditors and find out more about their current reputation.
For example, if you are a manufacturer who supplied goods to a client who was slow to pay and you decline their next order, you may be able to ask around to see if their reputation with others is pretty solid these days. If they are consistent, you may consider working with them again. They may have been experiencing an unavoidable delay or financial issues when they worked with you before that have now passed.
Working again with a debtor who was slow to pay in the past is a complicated matter. They are a credit risk but may have been experiencing difficulties before that they aren’t now. Thus, it will help to get more information to make the right moves.