Debt Recovery in a Post Covid World

The Covid period changed how debtors manage their finances and, more importantly, how they manage debt.

One of the more striking observations post-Covid has been the increased inconsistency in debtor payment behaviour. Debtors are no longer paying on a predictable cycle. Instead, payment patterns are far more erratic, often due to changing employment circumstances or fluctuating incomes.

Another significant change in debtor behaviour has been the move towards digital-first engagement. Debtors generally do not want to speak over the telephone, with many viewing it as an intrusive method of communication. They prefer emails and text messages and want the flexibility to respond in their own time. Increasingly, debtors also expect payment links to be provided so they can make payments outside traditional business hours.

Vulnerability, not just in a financial sense, has become much more complex. A high proportion of debtors now present with post-Covid vulnerabilities, whether linked to health, employment, or mental well being. This often requires additional time, different communication styles, and a more tailored recovery strategy.

As a business dealing with post-Covid debtors, there needs to be greater segmentation in how debts are managed, alongside a stronger focus on digital engagement. A more flexible and customer-focused approach is essential to achieving positive recovery outcomes while recognising the changing needs and circumstances of today’s debtors.