February 11, 2020

Every creditor has unfortunately had to deal with a difficult or uncooperative debtor at some point and we understand how quickly the situation can become frustrating. Phone calls go unanswered, notices informing the debtor of the debt get ignored, and so on.

When clients come to us with a debtor who is clearly evading payment, more often than not, that debtor is choosing to engage in one (or all) of, what we at Lichtman Eisen Partners like to call, the “3 D’s of Collection Defense.”

Once you can identify and understand these tactics, you can figure out what next steps you can take to go about professionally collecting on those debts.

So, what are the 3 D’s of Collection Defense and how do you overcome them?

Deny, Delay and Do Not Pay

1. DENY: The debtor denies the debt ever existed.

Your Response: Gather all evidence of the debt. That can be a personal guaranty, a contract, invoices and any emails between you and the debtor. This documentation will help confirm legal liability with the debtor and get you one step closer to being paid.

2. DELAY: The debtor continues to miss or push their payment deadlines.

Your Response: Provide your debtor with short deadlines for repayment and follow up once that deadline is missed. You should also prepare to file suit. Once your deadline comes and goes, and repayment is still not made, be prepared to act fast. Retain an attorney to file suit and aggressively pursue the matter.

3. DO NOT PAY: The debtor ignores your demand for payment and the lawsuit.

Your Response: At this point you will need to get a judgment regarding your lawsuit. This judgment will likely be for the amount claimed in the lawsuit and may also award you with additional fees to cover whatever costs you may have incurred as a result of trying to collect on your debt. Judgments give creditors much stronger tools to collect debts from a debtor. Those tools can include wage or bank account garnishments, as well as putting a lien on your home.

Once your matter is resolved, talk with your attorney about what changes you should be making to avoid problems like this in the future and ask them for ideas on how to improve the process of collecting debts from debtors moving forward. Simple changes, like adjusting your contracts, can help save you thousands of dollars in the future and help you avoid having to deal with the 3 D’s of Collection Defense ever again.

If you want to learn more about Lichtman Eisen Partners or think we may be able to help you collect on an outstanding debt, please contact us today.