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Partial Payments
Occasionally, a delinquent debtor will attempt to satisfy more than one creditor by making partial payments. The debtor may have every intention of paying their creditors and may be trying hard to catch up. Unfortunately, it is probably equally likely they will fall further behind as it is that they will eventually catch up.
While it is sometimes difficult to “look a gift horse in the mouth” it is important that creditors try to retain as much control over the collection process as possible. Therefore, creditors who do not challenge and require debtors to provide them with specific payment commitments tend to receive partial payments more and more sporadically, and eventually may end up with a bad debt. When a partial payment is received, the payment should be acknowledged. The debtor should immediately be asked to provide a realistic schedule for retiring the remainder of the balance due.
© 2011 by Michael C. Dennis. All Rights Reserved