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Do you know the different types of bad payers - Collectia Debtcollection Blog
Sebastian S.
13/04/2023

Do you know the different types of bad payers?

Types of bad payers - do you know them? | Collectia A/S

Bad payers need to be dealt with differently! Know the different types of bad payers - and how to deal with them.

A bad payer is not just a bad payer. They come in many different shapes and sizes. At the same time, the type has a major impact on the success rate of your debt collection cases, regardless of whether you, your debt collection company or debt collection lawyer handles the case.

Perhaps one of the most important tasks when it comes to debt collection and recovery of unpaid invoices is to understand your customers. By understanding your customers / debtors / bad payers - you also know how to handle the case. In other words, what works best for your debtor.

In this article, we focus on the (broad) different types of bad payers and how they should be dealt with individually.

At Collectia, we work with an incredible number of different types of persons and cases as well as categorizations of debtors, which are identified based on a wide range of parameters. This article is not a complete reflection of our more than 150 years of experience in debt collection and identification of debtor and payment types. It is a more general overview of the types we see and interact with every day in our debt collection work.

1. The forgetful 

We all know them; the forgetful debtor. The debtor who has received an invoice and then forgets to pay it.

In many cases, a reminder or a call to the debtor is enough to pay the invoice.

The forgetful debtor is often easy to work with and your efforts to recover the money are often not very extensive.

2. Deliberately withdrawing the payment

Many companies and private individuals more or less deliberately choose to drag out a payment as long as possible. Often even to the point of the creditor demanding his money.

There can be many reasons for this. Maybe the budget is under pressure, maybe the debtor is hit by unforeseen expenses or maybe the debtor found out that the purchased goods were more expensive than expected. 

This type of debtor often delays payment as long as possible. Many people who fall into this category do not pay until they are contacted by the creditor or the creditor's debt collection partner.

The effort here is often more demanding and may require a combination of friendly reminders, reminder fees and other costs to get the debtor to pay up.

3. Do not have the ability to pay

Unfortunately, there are an increasing number of debtors who are unable to pay an invoice, for a variety of reasons.

The debtors who are unable to pay your balances can be a complicated entity. At the same time, your invoice is not the only non-performing debt they have.

In fact, debtors who do not have the ability to pay often have the desire. It is this desire and willingness that you need to capture in order to secure your payment. If the debtor does not have the ability, one solution could be to offer a moratorium or an installment plan. This way, you improve the chances of getting your money back over time.

These are debtors who do not have the ability to pay,

We often see that this kind of debtor, who does not have the ability to pay, is poor at engaging in dialog about the debt. They simply ignore your requests. Therefore, this type of debtor often needs a combination of several different approaches. At the same time, this type of debtor often chooses to deal with the debt collection company or lawyer exclusively.

4. Do not have the will to pay

People who have the means but not the will to pay often require a lot of work for you as a creditor, your debt collection agency or your lawyer. Often this debtor has a wide range of reasons (justified or unjustified) why a claim should not be paid.

In these cases, we often see longer and more cumbersome recovery processes - and in the worst cases, legal action has to be added before payment arrives.

5. The professional debtor

The professional debtor is often characterized by the fact that they have neither the will, ability nor desire to pay their debts.

The professional debtor plans in advance whether he or she intends to pay. When the order is placed with your company, it is already fixed.

The professional debtor can be very difficult to deal with - for the creditor, the creditor's collection agency or the creditor's lawyer.

The professional debtor is far from impossible to recover money from - but the road to recovery can be long and require many actions and processes.

Avoid bad payers with Qatchr

It can be difficult, if not impossible, for many businesses to spot whether a customer will pay an invoice on time - or whether the invoice will ever be paid.

Fortunately, there are many good ways to steer clear of the worst bad payers. One of the best tools for this is to use credit scoring.

At Collectia, we have developed Qatchr - an online credit score that can rate individuals and businesses - where we give our recommendation for payment terms, credit limit, debtor information, highlighted bankruptcy analysis (can spot bankruptcy riders) and much much more.

Try Qatchr today. The service offers a wide range of exciting features that can help your business maintain a healthy economy.


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