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The Golden Rule of Collections: It’s Always Personal

By D Park Smith

D. Park Smith is a Texas-based lawyer representing business creditors worldwide in strategic debt collections, generally with balances over $100,000.  He conducts credit and collection workshops for corporations and industry groups across North America, and writes extensively about the subject he loves most – getting the money!

Those of us who make collection calls on a daily basis have a fascinating window on human behavior.  Customers in trouble with their vendors will say and do things that our non-collector friends wouldn’t believe – some predictably negative, occasionally some positive, and a few touching and sad.  Each collection contact we make exposes a small universe of drama.

Constant exposure to these emotional highs and lows has an impact on us.  When you think you’ve seen and heard everything, twice…it’s hard to avoid the plague of all collectors – per the dictionary, cynicism: a contemptuous disbelief in human goodness and sincerity.  I recently had an opportunity to confront my own cynicism, and the result surprised me.

Long story made short, I was hired to collect a sizeable balance owed by several partners who had somehow managed to keep their business afloat for almost thirty years, notwithstanding chronic delinquency with creditors.  Sales “politics” and social concerns kept my client from cutting their losses long ago.  When the business finally closed, the debt claim was a hot potato…in my lap.

After months of my probing and prodding, a lawyer representing the partners finally revealed that the business property had significant value, and was under contract for sale.  If all went as planned, the net sale proceeds would pay my client in full, along with the IRS and a handful of other claimants.  I momentarily suspended my disbelief, and prepared my client to harvest this unexpected windfall.

However… many more weeks passed and the sale had not closed.  With only vague explanations coming from the debtors, I reminded my client that these leopards probably hadn’t changed their spots after all.  So, we agreed to prepare for suit against the partners as quickly as possible.

A few days before our pleadings were drafted and ready to file, the debtors’ lawyer called with a allegedly firm closing date, and a sincere-sounding invitation to come get our check.  With extreme hesitation (see contemptuous disbelief, above…), I made cross-country travel arrangements to attend the closing… and, I sincerely hoped, to finally collect my client’s money.

In transit on closing day, I continued to check my messages at the departure and arrival airports, expecting the worst.  Finally on the ground in foul winter weather, a tire-screeching cab ride got me to the office building in the nick of time for the closing appointment…where I found the title company office dark and the door locked.

What a fool I was – after years in the collection business, ever believing that this deadbeat saga would have a happy ending!  Burning with humiliation, I stormed back to the elevator for a quick exit.  But when the door opened, two elderly gentlemen stepped out, one using a cane and the other stooped and unsteady.  They were chuckling together about something, but suddenly noticed me and introduced themselves – my debtors, in the flesh.  After a few minutes of awkward conversation, the buyers, lawyer in tow, also arrived.  Then the title company manager finally appeared with profuse apologies (traffic problems…), and we all processed to the closing table.

For the next hour I listened to the debtors recount their years of struggle with the now-defunct business, from their young men’s dreams of entrepreneurship to the bitter, debt-ridden end.  They told tales of profound social and economic changes in their neighborhood, of betrayal by partners and vanishing investors, and of the heroic measures taken to keep the doors open for so long.  Everyone in the room was silent, spellbound.  By the time the closing ended, I understood that these chronic “deadbeats” were, in fact, wonderful characters who had endured decades of adversity –with nothing to show for their work but ruined health and memories.

For me, the bottom line of this experience was a simple revelation: it’s always personal.  Whatever we hear from debtors in our collection contacts, whether we are collecting from mom-and-pop businesses or corporate payables departments, in the end we are interacting with people.  They live out their own unique life stories, and we become players in those dramas.

What do we really know about these people?  Good collectors always remember how important that question really is.


To reach Park:

D. Park Smith & Associates, P.C.

1915 Westridge Drive, Suite 105

Irving, Texas 75038


972 812-0952 phone

972 580-9089 fax

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