When Does a CUSTOMER become a DEBTOR?

I have been asked this question multiple times by multiple companies and so far every company been surprised by my answer.

A debtor is a debtor before you even put them on the books.

Being a debtor is a frame of mind. It's an attitude and outlook on life.

If a debtor has $20 left in their pocket and has the option of making a $20 credit card payment or ordering pizza, 90% of the time your debtor will order pizza.

The average debtor will make choices that put themselves in financial jeopardy and yes will find a reason to blame any other party but themselves. For instance, last Christmas I had a rather severe repossession season and during my postmortem interviews of the customers, I was able to find out that many of the people who had their truck repossessed were earning plenty of money to make the truck payment, but had decided to spend that money on Christmas presents rather than meeting their obligations. 

Because of this poor decision, many of these owner operators are now facing far more serious financial issues. 

During this interview process, I was called every swear word in the book and when I questioned as to why they didn't pay their obligation, I was usually hung up on. 

According to these debtors, it was my fault that their truck was repossessed irregardless of the fact that they had spent their money on everything other than their obligation.

• If being a debtor is a lifestyle, how is this brought to light during the credit review process prior to you approving this type of customer? It is one of the fundamentals of credit CHARACTER.
• What is your customer's character?
• Does your customer have the willingness to pay? This is sometimes hard to determine, especially if he is paying and other obligations viewed as a higher priority than yours.
• Is this lack of character reflected accurately on any third-party credit reports?
• Is this reflective of a low beacon or FICO score?
• What are some of the tools that you use to avoid putting a debtor on your books?

As always, I am looking forward to you input and Insight

John