How to Trace a Debtor

Tracing debtors can be a difficult task. Finder Monkey explain the reasons behind bad debts, how to avoid them in the first place for your business and finally how to go about tracing debtors that owe you money.
By: Rob Fellowman
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* Trace Debtors
* Debtor Tracing
* Find People Who Owe You Money
* Find Bad Debts

* Financial
* Legal
* Banking

* LEEDS - England

March 23, 2009 - PRLog -- Tracing debtors can be a difficult task. What you must always remember is that people who owe money are not necessary bad people; they are usually in debt for a reason such as:

•   Fallen on hard times
•   Not happy with product or service so refuse to pay
•   Unaware of payment terms
•   Have moved addresses and not told the company or people they owe money to

When trying to trace a debtor it is best if you can look into the person’s financial history and see if you can pin point something that can lead you to believe one of the above reasons is true, for example

•   The person was a regular payer until a particular date
•   The person has never paid any of the money owed

Now you should have a vague idea as to the reason for none payment and you can tailor your actions accordingly.

The first thing to do is to speak directly to the debtor, for this you will need to have been smart at the start of the business relationship, time after time I see firms carrying out hundreds if not thousands of pounds worth of work for a client or customer without having all the customers contact details, if you are dealing with an individual or sole trader you need to make sure you have

•   Home address/work address
•   Home telephone number
•   Mobile number
•   Valid email address

These are the minimum requirements; you should also try for partners name and date of birth. It may seem strange at the time but if you have to trace somebody then these are the pieces of information that will lead you to the person. If you are working for a company it is worth doing a company credit check, this will reveal

•   Company accounts – Are they making any money?
•   Directors names – Is the person who placed the order a director?
•   County court judgements – did they pay their other suppliers?
•   Directors dates of birth and addresses
•   Company telephone number

Once you have all this information you need to check it, try different numbers to contact your customer so in the event of them not paying you can get in touch with them quickly and resolve any matters before they escalate. It is also worth pointing out that if you are offering credit terms you need a consumer credit licence to cover you in the event that you are not paid.

When calling a debtor make sure you try at different times of the day, if you only call at one particular time and receive no answer then this could simply be because the debtor is working at that particular time. So spread the calls out, you can telephone somebody up to three times a day and leave three messages, I think that it is more professional to leave only one, you do not want to harass anybody. If after calling you have still received no response you must contact the debtor by post and email, I would recommend sending a basic letter to them, explaining the current situation, if after a week you have still not had a response send another letter but be firmer this time, explaining the action that will be taken if the debt is not paid by a particular date. The third letter should be worded stronger still, explain in clear detail the action that will result in the letter not being responded to, this could be

•   A debt collection agency will be used
•   A solicitor will be used
•   Costs and interest will be added to the account

If you still receive no response it is worth following up on one of the above actions but if you wish to persist then the next step is to confirm that they are still at the address. The simplest way to do this is to contact a neighbour of the debtor and ask them, it must be said that discretion must be used, do not tell the neighbour anything about the debtor just simply ask if the person still lives next door, if they demand to know who you are simply state that you have some correspondence that you need to get to them, if they press you further thank them for their time and end the call. Remember to withhold your number though! Its 141 if you don’t know.

Assuming that the debtor is still residing at the address it is time to follow up the threats with some action, you need to instruct a debt collection agency or solicitor to collect the debt on your behalf because you have run out of other legal options. You could use an online solicitor to send a “letter before action” again this is an idle threat but since it on headed paper from a solicitor it carries more weight, note that the solicitor will want at least £5 for doing this and will not follow up the action but this is a tried and tested technique and does have good results.

If the debtor has moved it can become very difficult especially if they have moved within the last three months, this is because it takes around this amount of time for the debtor to start showing at the new address. Everyone shows at their address, what I mean by this is that when you do normal everyday things like fill in your address on a form you leave a trail back to your address. Some people say that they don’t but everybody does, information is collected by everyone these days and if you read the terms and conditions of most large organisations they do say that they will pass information about you to other large organisations, this takes time so for three months none of the systems will be showing the new address and you will need to do something other than system based trace work. The only method now is to get on the phone and start calling other people, you can try neighbours who might know the debtors whereabouts, again remember not to start discussing any issues you have with the debtor with their neighbours as this could land you in serious trouble. You can also try people who live locally with the same surname, hoping that they will be relatives who will be able to help you in your location enquiry. To do this try, you can search an area and surname to get useful telephone numbers.
The best piece of advice is to collect as much information about the person when they are prepared to give you it i.e. at the start of any business relationship. When getting people to fill out any order form as them for all the information you need then, at that moment the balance of power is with you, they want something from you so you can use this to your advantage, if they pay you can destroy the information, if they don’t you have it to hand. It is also worth doing because the serial debtors and there are lots of them about, will not be happy leaving so much information with someone whom they intend to con, they will leave sections of the order form blank and suggest that they don’t need to fill in their address as you can contact them on the telephone, be wary of these people.

Finally good luck with any trace and collect work you undertake. Remember to always work with ethics and integrity.

# # #

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Tags:Trace Debtors, Debtor Tracing, Find People Who Owe You Money, Find Bad Debts
Industry:Financial, Legal, Banking
Location:LEEDS - England
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Page Updated Last on: Jun 30, 2009

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