Dealing with Debtors: When Is It Acceptable to Compromise?

When trying to recover money you’re owed from debtors, the wisest course of action is often to compromise. Allowing your debtor more time to repay or agreeing to accept a reduced sum may actually better serve your interests.

But that’s not to say that compromise is always the answer. Sometimes you’re better off staying firm and demanding immediate repayment. The key is to know if the circumstances are right for compromise, or whether you should stand your ground.

Don’t Be Too Eager

If your debtor fails to make a payment on time, don’t be quick to renegotiate your arrangement. Your starting point should always be to get in touch, remind your debtor of their obligation and request an immediate repayment. It could be your debtor simply forgot, made an error or experienced a temporary cash flow problem, and is now able and willing to repay in full.

Also, eagerness to compromise could cause your debtor (and other customers) to treat future debts less seriously. If they believe you will simply offer them more favourable conditions should they fail to pay on time, they may be tempted to do so.

Talk to Your Debtor

The key to debt recovery is regular communication with your debtor. If they are unable to repay, ask them why. Try to determine the reason behind their failure to meet their obligations. Are they likely to resolve the situation quickly, or does it seem to be a long-term problem? Do you think they are holding out on you, or do they have legitimate reasons for being unable to pay?

Any information you can obtain is useful in deciding which course of action to take.


Estimate the length of time your debtor will need for full repayment. If it’s relatively short, or you are prepared to wait, it may not be in your best interests to compromise. On the other hand, if you need to start recovering the money as soon as possible, you may wish to negotiate a payment schedule using instalments, or reduce the total amount in return for an immediate partial repayment.

Debtor’s Ability to Repay

If you suspect it’s a case of won’t pay rather than can’t pay, think twice about compromising. There’s no reason for you to accept anything less than prompt repayment in full if your debtor has the ability to do so, so don’t let them off the hook.

On the other hand, if your debtor is experiencing severe financial problems, face up to the fact that full repayment is unlikely, no matter what you do. In such circumstances, try to reach a compromise to ensure you get something rather than nothing at all.

The decision as to whether to compromise or not should always depend on the unique circumstances of each debt. However, the course of action you pursue has a huge impact on the overall success of your debt recovery efforts. In this sense, you may wish to consider using the services of a debt collection agency like P&J Debt, whose experience in such matters can help achieve better results.

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Maylands Business Centre,
Redbourn Road,
Hemel Hempstead HP2 7ES

Telephone: 01442 848500

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