Cooperation and Fairness When Dealing with Debtors

Posted by on August 2, 2013 at 8:15 pm.

Melissa Mickelsen, CBF, Geneva Rock Products, Inc.

The NACM Canons of Business Credit Ethics state that “Cooperation, fairness and honesty must dominate in all insolvent debtor proceedings.” Further, the Canons state that “Creditors must render all possible assistance to honest debtors who become insolvent.”

As credit professionals, do we ever struggle with this pledge? Do we occasionally want debtors to pay, and not just in the monetary sense, for the problems they have caused? Are we guilty of holding a grudge or harboring anger? Or are we guilty of reluctance when it comes to cooperating with honest debtors who have found themselves in trouble?

Human nature demands fairness, but unfortunately, in the credit profession, we may not always feel that our definition of fairness has prevailed. For example, it is not fair that we provide supplies or services promptly, but are often not paid promptly. It is not fair when we are not paid the full balance owing to us due to a debtor’s insolvency. And, it is not fair that some of those debtors, the ones who may not be so honest, simply do not care that they have not paid for what they have received.

But, it is our responsibility as credit professionals to look past these mental stumbling blocks and behave in a manner that is beyond reproach. As a group, we must act in a way that distinguishes us as the professionals we are. We must overcome feelings of anger and frustration and cooperate with honest debtors to ensure the best outcome for all parties.

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