Bad Debt Collection: How Long Should It Be Done? By Jim Oneil

A debt will always remain as it is until it gets fully paid. This means that if someone owes you money, you certainly have the right to collect the payment from him. It is your money after all. Even as you do so, you should also realize that there are laws that may no longer be applicable if you want to use to them to compel the debtor to pay. In Britain, for example, if you have no contact with the debtor for a span of six years, you may no longer be able to collect the payment for the bad debt.
Of course, this does not mean that you could no longer make a follow-up on the debtor and try collecting the money from him. It is your right to re-acquire what is originally yours, particularly if it is a debt. However, as pointed out already, you could no longer take advantage of any law to compel the debtor to pay. You just have to think of more effective ways of making sure that the debtor meets his obligations. Apparently, this would entail a lot of effort on your part. Still, you could never be too sure whether you would actually get to see the debt repaid soon.

What you should avoid therefore is to be incapable of establishing communication with the debtor for six years. This would guarantee that the debtor would not run away from his responsibility and that you would still be able to use the law to force him to pay. To do this, you should not scare the debtor with huge installments. If you just send him a bill with the a four-figure amount to be collected, he may just start computing the costs of running away and compare it to the cost of paying you.
The reason why you are collecting the debt payments is that you simply want to get what is yours. This is your business. Scaring the debtor or telling him that you could do many things just to get the payment would only backfire. Instead of sticking to his obligations, the debtor may just decide to run away. When this happens, you would only all chances of being repaid. The logic is pretty simple; it is better to be lenient than to insist that you are the boss. With the latter, you are only able to satisfy your pride. But with the former, you get something more tangible, the payment.

The best that you could do is to adjust the payment methods or schedules according to the capabilities of the debtor. Under such flexible arrangement, the debtor may be able to heave a sigh of relief because the burden would no longer be as heavy. However, he would still pay the entire amount of the debt plus the interest rates. Another option that you could apply is to sell the debt to a debt collection agency. This method would certainly relieve you from the tedious task of collecting the payment.

Jim Oneil is a writer with a special interest in debt issues and personal finance. He has written for small local newspapers in the past and now devotes part of his time writing about debt consolidation and management and also UK based financial products.

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