The #1 most misguided debt collection strategy.

Unpaid debts can be frustrating for a creditor, especially a creditor who is not a professional lender and not accustomed to handling non-payment.  Often, the inexperienced creditor’s first instinct is to go “nuclear” on the debtor.  They will want to put immense financial pressure on the debtor.  They will consider other pressure-points, for example, filing complaints with law enforcement or professional licensors over the conduct of the debtor that gave rise to the debt. 

The “nuclear” approach is often misguided, at least if the creditor’s sole objective is debt repayment.  A debt will not be repaid unless the debtor has the means to perform.  Furthermore, in Washington, debtors can discharge liability for debts through bankruptcy or receivership proceedings and start-over.  Or, debtors can just simply stop doing business and generating revenue.  Forcing a debtor into financial collapse, or putting their liberty or professional license(s) in jeopardy, is often not calculated to obtain successful debt repayment.

If the debtor is without the present means to perform, but has earning potential, the strategy should not be to bury the debtor financially and professionally.  Rather, the creditor should be, essentially, rooting for the debtor’s success.  Payment plans, for example, can be utilized to service the debt based on the debtor’s ability and allow the debtor to recuperate financially. 

Creditors can benefit from the advice of Washington counsel in negotiating and structuring repayment plans, including provisions for collateral, where possible.  Counsel can help create solutions calculated for successful repayment over time and avoid total loss scenarios for creditors.