By Dean Kaplan, CEO and President, The Kaplan Group
As a debt collector, I obviously see a lot of people who have found themselves in financial trouble. Having unpaid bills does not mean you are a bad person or unintelligent. It just means that you’ve made a few financial mistakes, or had some bad luck. Bad luck is hard to avoid, but these tips can prevent you from making financial mistakes.
Pay Attention to the News
Whether you own a small business, or are just concerned about your own finances, the outside world can impact your financial situation. Oil prices, weather, global pandemics … these can all affect your job security and disposable income. I’ve met many people who lost their jobs shortly after making a big purchase. Others find themselves in debt because of bad investments. While you can’t predict every job loss or market trend, knowing what’s going on in the larger world can help you make better decisions. I’ve also worked with small business owners who wound up in trouble because their clients could no longer pay bills due to global problems. We live in a 24-hour news cycle and trying to stay on top of everything would be exhausting, but subscribing to one or two reputable business news sites can help you get a better understanding of the bigger picture around your individual finances.
Read Contracts and Agreements Carefully
I advise clients to put payment terms and conditions in their credit applications and on their contracts. Too often I see people who have gotten into financial trouble because they did not carefully read a contract they signed. Before agreeing to any situation in which you’ll be borrowing money for yourself or your business, make sure to read the agreements carefully. Not reading carefully could wind up costing you large amounts in interest or late fees, which could increase your financial problems.
Sadly, medical bills are a huge problem for many Americans. If you cannot pay your medical bills, hospitals and medical offices will frequently negotiate prices or payment plans with you. Many pharmaceutical companies also offer reduced cost medicines. It’s not only medical bills that can be negotiated. From cars to televisions, many items that you purchase can be negotiated. If you are being called by debt collectors or others to whom you owe money, you may also be able to negotiate new payment terms or a new payment plan. Never be afraid to ask if something can be negotiated.
If you own a small business, do not let your own bills go uncollected. Businesses of all sizes frequently get into financial trouble because other companies or individuals owe them money. The longer you wait to try and collect on an unpaid bill, the less chance you have of being paid. Make sure you are invoicing your customers and following up on any unpaid invoices.
If you do find yourself in debt, handle it as quickly and honestly as possible. Debt has a way of building on itself, causing more problems and leading to bad decisions. The quicker you pay your bills, the quicker you can reestablish your credit and go back to make good financial decisions.
Dean Kaplan is president of The Kaplan Group, a commercial collection agency specializing in large claims and international transactions. He has 35 years of manufacturing, international business leadership and customer service experience. Today, he provides business planning, training and consultation to a variety of global companies.