When to Write-Off Debt
Are you struggling with debtors?
Are they dodging your emails and phone calls?
You may be considering writing off their debt. A write-off occurs when a business removes the charge from a non-paying customer and adds it to their liabilities. In accounting, it will look like this - the business will debit the unpaid amount into their unpaid receivables account within the liability section and credit the amount in accounts receivable.
Here are a few situations when a write-off may be necessary:
A Debt Collector Can’t Help – When you need payment, reach out to a debt collector in Michigan first! No matter the age of the debt, RSD is willing to help! We can use skip tracing techniques to find your debtor, contact them, and help negotiate until they pay. If they still haven’t paid after our efforts, it may be time to write-off the debt.
Your Debtor has Gone out of Business – As a commercial business, you likely bill your clients as their company name. Once this company doesn’t exist anymore, it can be hard to track someone down to receive payment. The chances of collecting from an out-of-business company are low.
The Debt is Too Old – In a past article, we described why the age of the debt matters. After 6 months, the recovery rate of a debt decreases to 52.1%. After 2 years, it has a 9.3% chance of being collected. If the debt is even older, you may want to consider a write-off.
The Debtor Can’t Be Found – You can contact debtors through phone, email, social media, mail, and can even show up to their location. If the debtor can’t be found or contacted through these channels, even with a debt collector’s skip tracing abilities, there’s little chance the debt will be paid.
The Debtor is Bankrupt – After a company has filed for bankruptcy, they’ll be liquidating their assets to their creditors. If they owe their creditors more than they’re worth, you may end up with nothing or waiting longer than you can afford to receive anything.
Debt Collector in Michigan
Don’t let your debtor win!
Avoid write-offs with the help of a debt collector in Michigan!
Certified by the Commercial Law League of America and endorsed by the International Association of Commercial Collectors, Ross, Stuart & Dawson has the know-how to get you the money you deserve.
Our kind, professional-approach is empathetic yet firm and manufactured for success! Contact RSD today at 888-701-8181 or fill out our contact form to get started!