collect bad debt
Post on 15-May-2015
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Collect Bad Debt
Ormita offers businesses a way to collect bad debt without the need for litigation.
Ormita allows the debtor to pay in products rather than cash and will supply the creditor with advertising or other goods and services in return.
This is useful for debts older than 120 days where the debtor is unable to pay in cash.
Who Needs This Solution
Creditors• Owed money more than
120 days overdue• Those who owe you are at
risk of not paying• Cost to collect overdue
money is high• Long-time to collect• Value of the debt may be
low or high• You need the debt repaid
now• Repossessing assets
means you will not receive full value
Debtors• Having difficulty repaying
debts• You cannot pay until
others pay you• You have products which,
if sold, could repay the debt but you are having a hard time finding more customers
• Interest and finance charges to borrow money costs a lot
• You want to fix your credit history
It is common for a debtor to have surplus stock but not surplus
cash!
Ormita can take Debtors products and give you
something else of value in return
Why do this?• You may not need the product that the debtor
sells• It may be difficult to re-sell the products
immediately for cash• If product re-sold it is usually at a discount• If the debtor could not sell the products for cash
then it is likely that the creditor may also not find a way to sell these products
www.ormita.com
This is an Indirect Exchange
HOW IT WORKS
Step 1
You lodge details of the debt with Ormita
Step 2
Ormita contacts the debtor
Step 3
Ormita receives product from the debtor instead of cash
Step 4
You now have a credit in your Ormita account which you can utilise to purchase other goods
and services in the Ormita network.
Step 5
You do not need to receive the same goods as the Debtor has provided to Ormita. You can
select from any other products or services in the Ormita network.
Congratulations !!
You have just converted a bad debt into goods and services that you need!
BENEFITS
Overview of Benefits
• Fixes the problem of very overdue cash• Receive value rapidly• Quicker than litigation• Maximizes the value of what is returned• Reduces costs (collection, legal fees,
interest)• Reduces risk (unpaid bills, business
cash-flow being affected)
Fixes Overdue Cash Problems
• Collect debt before it becomes too late!• Get in line before other creditors• Spend barter credit to buy what you need• Debtors pay with goods, making it easy• Use trade credits for advertising or
marketing• Opportunities to purchase internationally• Take action before it’s too late
Reduces the Cost of Collections
• Accepting payment now reduces the cost to collect outstanding money later
• Collection costs• Legal fees• Time• Consulting services• Interest• Need to borrow money to cover short-
term costs
Minimises Risk
• Reduces the risk of long-term debts being uncollectible
• Receive something of value now instead of later
• The older the debt the less chance that a debtor will repay
• Creditors may receive an asset, in hand, instead of a paper “promise”
Protects Your Profit
• No reduction in value of the debt versus what you recieve
• You turn an outstanding debt into an asset
• You have used a debt to buy things you need
• Cash is saved by the business because you have reduced your cash expenses without decreasing your purchases
PRESS COVERAGE
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