‘Pay Up’: On Squeezing and Being Squeezed

My father’s unexpected death in 2010 suddenly thrust me into managing a business I was totally unprepared to run. Overnight, I inherited two inseparable realities:

1. We had a growing stack of overdue bills from people and places I’d never heard of, all demanding payment right away.
2. Meanwhile, the company bank account was basically empty, because nobody was collecting the money that customers owed us (that had been my dad’s responsibility).

These twin problems were two sides of the same horrible coin, and felt completely intractable. How could I pay anyone unless someone paid us first?

Nothing in school had prepared me to enter the world of negotiating, collecting, or paying down debts. I always thought of debt as a dirty word; I never carried a balance on my credit card, and diligently made slightly-higher-than-minimum payments on my student loans. Now I was confronted with a problem I could barely wrap my head around, and I didn’t know where to start.

Debt collectors, though, know exactly where to start — and when. The first time I received a collections call, I was in my mom’s apartment, lacing up my shoes the morning of my father’s funeral. A deep-voiced man was calling about some overdue credit card bill, and I quickly said, “I’ll pay as soon I can.”

“But when?” came the angry reply. For someone who’s used to cheerful call center reps from Zappos and LL Bean, the direct aggression of a collections agent can be jarring. Collections companies make their money by being intimidating and menacing — the industry is rife with well-documented abuse, but it’s also highly regulated. I needed to figure out how to play by the rules of the game until we could comfortably pay what we owed.

I said “soon,” and quickly hung up, trembling and scared.

From my tiny grad school apartment, I pored over our balance sheets. The business made money — but where was it, and why wasn’t it in our bank account?

The answer was: It was still with the customers. People who were always slow to pay my dad when he was alive, more or less stopped paying altogether after he died. I started calling customers one by one to introduce myself and feel things out.

At first I played it cool and sheepish about the money they owed us. “Do you think you’ll be able to pay us this week?” To my relief, most of them actually said yes.

And then… exactly nothing happened. Nobody paid us anything. I felt like an idiot.

Our lawyer told me I could “get more aggressive” about collecting our due. I needed to become less timid about the mounting trouble we were in. Taking a cue from the collectors on my back, I started getting annoyingly persistent. I’d call customers daily, my tone becoming clipped. I’d ask when, precisely, I should expect payment. If someone said they needed to call me back later, I would say, “No — what time will you have an answer for me? I’ll call you back then.” And then I would.

My father probably worried about alienating his customers, even when they were behind on their bills. I didn’t have that luxury — I was behind on my bills, and whatever loyalty my dad felt to his clients didn’t transfer to me. I felt fully justified in becoming a major dick.

Collection calls from the other side were coming day and night on my personal cell from unknown numbers, and I was always too scared they’d be business-related emergencies that I wouldn’t just let them go to voicemail. I learned that many debt collectors will begin the call by asking for the debtor by name, before identifying themselves and what they’re after. When I knew I couldn’t pay, I would have awkward routines with call center reps:

Collections agent: “Hello, I’m calling from [bank]. May I please speak to [name]?”

Me: “May I ask what this is regarding?”

Him: “Am I speaking with [name]?”

Me: “What is this in reference to?”

We’d go back and forth like this a few more times, but they’d always end the call before explaining what he was calling about. That was usually good enough to buy me a couple more weeks until I could send them a check.

Some debts turned out to be negotiable. One bill was for a portion of an old insurance policy, long expired but never fully paid off. My lawyer told me I’d need to pay something, but that I could try talking them down. Emboldened, I offered the snarling collector half of the total amount owed, but said I’d need to pay over six months. That was my red-herring.

“Or,” I said, my voice shaking. “I can pay you 30 percent of the total right now. I could put that check in the mail today. Does that work?” I remember pushing mute on my phone so that she couldn’t hear my breathing.

It turned out the magic words were “right now” and “today.” The 30 percent offer was cheerfully accepted. I asked for confirmation of the agreement in writing — a full and complete release from the debt in exchange for a 30 percent payment right away. Then I sent them the check.

Meanwhile, I began practicing my own collections routines in the mirror or with my girlfriend. “When will you pay?” I’d say sharply to an overdue customer on the phone. “This is now several weeks overdue. Will you send a check today? Tomorrow? When?”

I became distrustful. If a customer said they were mailing a check, I’d ask if I could collect it in person instead. Offering to show up at somebody’s office — and then actually hauling myself to Queens or Westchester to do it — was super effective.

I would negotiate on this side of the equation, too. If a customer owed us, say, $20,000, I might offer a small discount if they paid right away. Channeling my inner tough-guy, I ominously added that the offer would expire at the end of the day. “Clock’s ticking,” I’d say.

As I perfected my own techniques for stalling creditors, I became intolerant of others’ excuses: Our accounting system is down. Our office only sends checks once a month. The guy who does your invoices is out sick. I need to talk to my supervisor. Our office just moved. We leave early on Fridays.

I don’t care about the reason, I replied flatly, my adrenaline coursing with righteous indignation. All I need is a check. All I want is the goddamn money you owe us, so I can pay this other goddamn company that’s breathing down my neck. Can I come by in an hour?

I think many small business owners go on like this forever: locked in a perpetual cycle of paying and collecting, never sure if you’ll have enough cash to make it through the month. Behind every transaction is a complex calculus of what can be deferred and what can be collected, and from whom, and by when. Your ability to pay depends on your place in the food chain — who you owe, who they owe, and so on.

But to me, this all felt sleazy and horrible — dodging and stalling bill collectors, playing the heavy with people I barely knew and giving them a hard time when they couldn’t or wouldn’t pay. When the time seemed right, I wrapped things up and sold the business. I sometimes miss the rush I’d get from putting the squeeze on people to collect money. But I never miss being on the receiving end of that squeeze.

Matt Baer lives in New York and no longer owns a bus company. Follow him on Twitter: @ThisIsMattBaer

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