3 Ways Banks Can Stay Proactive to Prevent Debtor Delinquency

 Posted on May 11,2021 in Bank Collections

This past year has been difficult for many people because of the ongoing COVID-19 crisis. Across the country, people and businesses alike have had trouble making ends meet, with many comparing this situation to the Great Recession in the late 2000s. According to the American Bankers Association (ABA), consumer credit delinquencies rose at the end of 2020, despite those numbers decreasing in the prior two quarters. All 11 loan categories saw an increase in the number of delinquent accounts, with home equity and mobile home loans seeing the largest increase. Nobody likes a late-paying customer, but there are ways banks can help keep the number of your delinquent accounts to a minimum. 

Be Proactive With Your Customers

The best way to deal with delinquent customers is to try to prevent them from becoming past-due. You can do this by implementing a number of practices, like email communications, notices through the mail, or phone calls. Giving your customers multiple reminders about upcoming payments may help prevent their accounts from going delinquent.

Clear Communication Goes a Long Way

Try to prevent any confusion about how much your customer owes on their account. You should take a second look at how you invoice and bill your customers. Make sure your invoices are not too cluttered or confusing. The focus of the invoice should be on the payment amount that is due, the date it is due, and what types of payment you accept. You can also use your invoices as a way to restate your payment policy and ensure debtors understand late payment penalties. 

Be Flexible With Your Terms

If a customer does call you to discuss payment options, you should be open to the idea of adjusting the terms of their loan. Taking your client’s entire situation into account can often help you to continue to receive payment. While it may mean that it takes longer for your customer to repay the loan, it is better than having to send their account to collections or having to deal with a customer who may potentially need to file for bankruptcy. 

Speak To a Chicago, IL Debt Collection Attorney Today

If you have delinquent customer accounts, dealing with them can be a long process, and in the end, you still may not get the money you are owed. The best way to deal with delinquent customer accounts is to try to prevent them from becoming delinquent in the first place. At Dimand Walinski Law Offices, P.C., we can answer any questions you may have about collecting past-due accounts. If necessary, our team of Chicago, IL debt collection lawyers can help you determine your next steps to collect the amounts owed. To schedule a consultation, call our office today at 312-704-0771.

Sources:

https://www.aba.com/about-us/press-room/press-releases/aba-report-consumer-delinquencies-rose-in-fourth-quarter-of-2020

https://bankingjournal.aba.com/2021/04/staying-one-step-ahead-of-credit-risk/#_ga=2.228316829.1037669538.1620411495-2098255569.1620148093