How Will Lockdowns Impact Approaches To Debt Collection

In the wake of the global pandemic, the worldwide economy has taken a severe hit. The government enforced lockdowns have halted the operations of many businesses and enterprises, which has been especially hard for small and medium-sized businesses. Several companies have been forced to shut down, creating an upward trend in global insolvencies.

Many companies that are still functioning are finding themselves under a heap of unpaid invoices. Businesses everywhere are struggling to collect payments from their respective clients. In an atmosphere of unemployment, and foreclosures, while some find themselves with insufficient liquidity, others cannot pay the debts that they owe upfront. Under these uncertain circumstances, it is understandable why many clients are forced to delay or default on their payments.

This is a very stressful period for business owners everywhere. However, it is also a very stressful situation for those who owe debts to companies. Recovering some of these debts would bring immense relief for these businesses, and finally, paying off their debts would bring relief to debtors. While in an ideal world, neither side would be facing this problem, it is the reality.

However, most businesses don’t have the time to chase down their debtors and spend hours going back and forth trying to get their invoices paid. This is where hiring a debt collection agency can prove to be of immense value for businesses. Experienced debt collection agencies are well-versed in the legal practices of tackling debt and specialise incorrectly approaching the debt collection process without breaking any laws or devaluing and demeaning the debtors.

eCollect.com.au is an excellent example of this. As one of the leading debt collection agencies operating in Australia and New Zealand, eCollect’ collection practices exceed their client’s expectations, as well as being ISO 9001 certified. eCollect’s approach to debt collection focuses on working with the debtors to help them find the best solution to complete their financial obligation. This might mean allowing an extended period and putting together a repayment package flexible to their finances. Depending on the circumstances, sometimes debtors could be allowed to skip a payment if they are struggling. Everything hinges on communication. eCollect’s priority during this pandemic and lockdown was maintaining contact with the debtors trying to understand their side of the struggle and hardships. This thoughtful and human approach to debt collection helps businesses and debtors find common ground and resolve their problems without jeopardising their companies and relations with the clients.

There are plenty of examples of predatory debt collection practices that can use complex legal technicalities where the debtors are either unaware or unable to respond promptly. The official verdict that leads to wage garnishments and bank garnishments can cripple the financial security and an entire household for the debtors. Although such practices completely adhere to the legal systems, ethics and morality undoubtedly border on the red line.

Having a collection partner like eCollect can help a business accelerate its collection process for the accounts receivable while maintaining customer relations and even strengthening it. Adapting and adjusting the collection approach for firms during the lockdowns and the pandemic and maintaining good communication with the debtors will ensure everyone’s survival through these rough times. After all, businesses only thrive through their customers.

If your business needs assistance with debt collection, head to eCollect.com.au today to learn more about their services.