Collection Stories

8 Nightmarish Truths About Business Debt

Business Debt  |  3 min read

Just when you thought it was safe to deliver without payment in full…

Many things that happen in business are scarier than fiction. Entrepreneurship is a risky, stressful undertaking, and numerous dangers lurk in the dark, murky places between fulfilling a sale and getting paid.

In the spirit of the Halloween season, here are 8 truly terrifying facts about business debt, and how to ensure you keep your head about you:


1. Your ability to collect is tick-tick-ticking away. Every province or territory has a statute of limitations, and most are only two years. After that, you can no longer litigate, which makes the debt virtually worthless. Solution: never wait longer than 90 days before sending overdue debt to your collection agency. Getting a partial payment or written acknowledgment of the debt resets the limitation time.


2. The devil is in the details. Gaps in your contract or documentation can lose you piles of money—and plenty of sleep. Solution: work with a good lawyer to ensure your contracts are airtight, and take the time to scope projects and deliverables in detail.

Related: Collection Agency Horror Stories

3. Customers will ghost you. It’s a spectre that torments virtually every credit-granting business. Solution: When a debt is overdue and your calls aren’t returned, it’s time to send the file to collections.

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4. Suing a debtor can be a dreadful mistake. When a customer won’t pay, your collection agency very seldom needs a court judgment to collect. Hiring a lawyer only wastes time and puts more money at risk. Solution: send the account straight to collections, along with all supporting documentation. That should be all you need to do. And on those rare occasions when litigation is necessary, it’s most cost-effective to use a collection agency with an internal legal team


5. Your life is wasting away. Time is the only truly non-renewable resource. You can create more of anything else you need, but every grain of sand that passes through the hourglass of your life is gone forever. Solution: Act Quickly. Don’t waste your best years doing things outside your wheelhouse—like chasing after poltergeists and overdue accounts. Professionals are much better at both.

Related: Spooky Business Stories to Keep You Up At Night

6. Excuses are evil. When a customer relationship enters the twilight zone and you’re hearing bizarre and sorrowful tales about why you won’t be paid as promised, what can you do? Solution: don’t cave. A deal is a deal, and you made good on your end, right? So should the other party. You’ve got enough to worry about running your own business, and deserve to be paid on time… spinning heads notwithstanding.

7. Shadowy figures begone. If your perception of debt collector techniques include neckless thugs hounding your clients and muttering threats involving broken bones, you’ve seen a few too many movies. Professional collectors know how to help debtors find ways to pay, and excel at customer rehabilitation. Solution: working with a great collection team will clear the murkiness from your bottom line. And nobody gets hurt.


8. You risk becoming one of them. When a customer fails to pay, you have a problem. If the amount is large, if it happens more than once—or both, you could be doomed. When you find yourself staring at overdue account notices of your own as a result, it’s already happened: you’ve transformed into a debtor yourself. Solution: the only way to break the chain is to take action and engage your collection agency. It can be a positively transformative experience for your business.

So if you find yourself fighting to wake up, but the nightmare is real, flip on the lights and call in the debtbusters: your trusted collection agency. Do it early and feel the warmth returning to your bones, as your enjoyment of running a business reveals itself again.

There’s really nothing to be afraid of. Unless you choose to wait…

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Brian Summerflet Author: Brian Summerfelt

President and CEO of MetCredit, Canada's top-performing consumer and commercial collection agency

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