RSSM Digital NPAworldwide Edition March 2020 | Page 31

STAGE THREE: The debtor is 60 to 90 days past-due with main creditors. They are not return-
ing your calls and will not commit on when you get paid. They also may become abusive if you
do talk to them regarding payment.
YOUR RESPONSE: You need to do something…time is running out. Send to collections or
send to your attorney.
STAGE FOUR: They are not paying anyone. Companies have filed suit against them and every-
one has turned them over for collections. The client does not answer the phone live but instead
uses voice mail or an answering machine. They never return calls. Their employees are calling
you for a job.
YOUR RESPONSE: You really do not have one. If you turn it over for collections they will not
pay, as they have lost the ability to pay. If you file suit it would be a waste of time because it takes
about a year to work through the legal system and they will not be around by then.
Inevitably, the company dies. The phone is disconnected and they have moved. At this point, they
can legally change their name and open up somewhere else and not owe you a dime.It is critical for
you to catch it before it gets to stage 3. Typically, a company in stage one or two can improve and
pull out of it, while companies in stage four rarely survive.
Consider these sobering statistics: If a company is 30 days past-due, you have a 97% chance of get-
ting paid on your own. If a company is 90 days past-due, you have a 72% chance. If a company is 6
months past-due, the success rate drops significantly, to 37%. If the account is 12 months past-due,
your chance is a mere 6%.
Think your slow-paying client may have larger problems? Find out. Send an e-mail to request@
staffingdebt.com to receive a coupon good for one free Business Credit Report.
31
WWW.RSSM.BIZ |
WWW.RSSM.BIZ