jarman nick 2018When it comes to collecting debt, tax season is without argument the most profitable season of the year. Tax season starts at the beginning of February and wraps up in early May. February generally sees the highest return and slightly tapers off each month thereafter. One issue that can ease its way into tax season for collectors is complacency. Collection amounts during this period are so much more than other months it is easy for collectors to forget how they should approach each talk-off with the consumers. At the end of the day, whether it is tax season or not, there is only one way to collect a debt: that is the right way. Below we will discuss what exactly “the right way” means.

The Balance in Full

Just because it is tax season doesn’t mean that consumers don’t owe the entire balance, even though sometimes consumers and collectors alike jump right into settlement discussion without a firm demand for the balance in full to be paid. Collectors should approach each talk off during tax season just as they would anytime of the year, requesting the balance in full be paid off at the present time. If the consumer is unable to pay their entire balance, the next step would be to ask how much of the balance they can pay at the present time. From there it needs to be determined how quickly can the consumer pay the entire balance. Once these probing questions and subtle demands are established, there will be enough information provided by the consumer to steer the call in the right direction.

The Settlement in Full

Once the balance in full talk-off has run its course it is the opportune time to get into settlement discussions. It is important to remember that an estimated one out of three consumers have an account in delinquency which means they will be receiving plenty of calls during tax season. They most likely are educated enough at this point in the process that settlements are at their peak during tax season. Be careful not to jump to the lowest amount allowed when discussing settlements. Start high and work down in order to ensure you are getting the maximum recovered for you and your client. Urgency should be stressed when discussing settlements. Avoid long, drawn out arrangements on a settlement. They are getting the settlement because they are taking the time at present to resolve this debt for all involved.

The Down Payment and Payment Arrangements

If the balance in full and settlement in full options do not result in resolution of the debt, a payment arrangement is the next best option. It is important to request a down payment on all payment arrangements at any point in the year. However, during tax season consumers have more disposable income making it a great time for them to knock out a large chunk of their debt if the balance is high. Follow this with setting them up on a reasonable payment arrangement that gets the debt repaid in the fastest amount of time.

In conclusion, when focusing on maximizing collections during tax season it is important for all collectors to remember the fundamentals and ensure they approach each opportunity as if it was their last.

Nick Jarman is the Owner of RightAway Consulting & Coaching as well as the Chief Operation Officer for Credit Collection Partners.