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1152 Collecting Debt

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Welcome to English as a Second Language Podcast number 1,152 – Collecting Debt.

This is English as a Second Language Podcast episode 1,152. I’m your host, Dr. Jeff McQuillan, coming to you from the Center for Educational Development in beautiful Los Angeles, California.

Visit our website at ESLPod.com. Become a member of ESL Podcast. When you do, you can download the Learning Guide for this episode. You can also like us on Facebook. Go to facebook.com/eslpod.

On this episode, we’re going to listen to a dialogue between Ken and Marjorie about getting money back from someone you lent it to. Let’s get started.

[start of dialogue]

Ken: Look at this list of customers who still owe us money. How is this business supposed to survive if we keep extending credit?

Marjorie: We started doing it because some of our best customers didn’t have ready cash. They’re good for it.

Ken: I know they’ll eventually pay their outstanding debt, but what are we supposed to do in the meantime? We need that cash to buy stock.

Marjorie: We can call in the debt and set a deadline for repayment. We can give those who are really hard up an extension on a case-by-case basis.

Ken: What if they still don’t pay? We’d have to turn it over to a collection agency. We’d only get 40 cents on the dollar, but we’ll have to close our doors if we don’t collect.

Marjorie: Using a collection agency would be a last resort. I’ll call each of our major debtors and have a talk with them. I’m sure they’ll come through.

Ken: I hope you’re right or we will be the ones asking for credit!

[end of dialogue]

This episode is called “Collecting Debt” (debt) – notice the “b” is silent when we pronounce the word. “Debt” is money that you owe someone else, money that someone else who gave you to use temporarily, but that you have to give back to that person. “To collect debt” means to get the money back from someone who doesn’t want to pay you back or perhaps is slow in paying you back.

Ken begins our dialogue by saying, “Look at this list of customers who still owe us money.” “To owe” (owe) someone is to be expected – and in fact, required – to pay someone something or to do something for someone else. If you owe someone money, you have to give that money back to someone. The idea usually with “owe” is that the other person has done something for you or, in the case of a debt, given you money.

Ken continues, “How is this business supposed to survive if we keep extending credit?” “To extend (extend) credit (credit)” means to allow someone to buy something now and pay for it later. You’re probably familiar with the term “credit card.” A “credit card” is an account – an agreement, basically – you have with a bank or a, what we would call, “financial institution” that allows you to buy things now and pay for them later. Individual stores can also extend credit to their customers. They can allow you to buy things and then pay for it later.

This store that Ken and Marjorie have extends credit to its customers, but many of the customers still owe them money. Marjorie says, “We started doing it” – that is, extending credit – “because some of our best customers didn’t have ready cash.” “Ready (ready) cash (cash)” is money that you can spend right now. If a business has ready cash, it can go out and buy something and pay for it right away. It has money available. If a business doesn’t have ready cash, well, then it doesn’t have the money in its bank account to buy the things it needs to buy.

Marjorie says that the best customers are “good for it.” The expression “to be good for it” means to be trustworthy, to be reliable – most importantly, to be able to pay back money that you owe. If someone says to you, “Give me $10. I’m good for it,” that person is saying to you, “I will pay you back later. I am a responsible person. I have enough money. I just don’t have that money with me right now.” That’s sometimes true and sometimes isn’t. If you’ve ever lent – that is, given – money to someone with the expectation that person will give it back to you, you probably know that isn’t always the case when someone says he’s good for it. He isn’t always good for it.

Anyway, Ken continues, “I know they’ll eventually” – in time, in the future – “pay their outstanding debt, but what are we supposed to do in the meantime?” “Outstanding (outstanding) debt” is money that hasn’t been paid on time. It’s debt that you owe someone that is, we could say, “overdue.” It’s late. “In the meantime” means while we are waiting for the people to pay us back. Ken is asking what he and Marjorie and their business should do while they are waiting for these customers to pay the money they owe back to the business.

Ken explains, “We need that cash,” that money, “to buy stock.” “Stock” (stock) here probably means the things that the store buys. “Stock” can also refer to partial ownership you have in a company, something you would buy on what we call a “stock market.” But here, “stock” refers to physical goods – things that a store sells. Marjorie says, “We can call in the debt and set a deadline for payment.” “To call in a debt” means to demand that the person who owes you money pay you immediately or as soon as possible. Usually, “calling in a debt” means requiring someone to pay money before the scheduled time or before you had originally agreed to have them pay it.

When you borrow a large amount of money from someone, often you pay that money back in payments, or installments. So, if you borrow a thousand dollars, you may pay 100 dollars this month, 100 dollars next month, 100 dollars a month after that, and so forth. If, however, you miss one of those payments, you’re late in paying the monthly payment, a bank or a store may call in your debt. They may require you to pay it all back now because you missed a payment, or they may set a deadline for repayment. A “deadline” is a date by which you have to do something.

“Repayment of a debt” means giving all of the money back to the person who loaned you the money. Marjorie says, “We can give those who are really hard up an extension on a case-by-case-basis.” If someone is “hard up,” that person is in a difficult situation, especially a financial situation. Someone who doesn’t have a lot of money, who perhaps lost his job, might be “hard up,” meaning he doesn’t have very much money. An “extension” (extension) is additional time – in this case, to pay back your loan.

Sometimes a bank or a business, instead of calling in your debt, will give you more time to pay it. They will give you an extension. Marjorie says that she and Ken can do this with their customers on a “case-by-case basis.” A “case-by-case basis” would mean looking at the details of each person or each situation and making a decision on that information, not on just one rule for everyone. Doing anything “case by case” means you don’t apply one rule or one regulation to everyone. You look at the individual circumstances of each person. Ken says, “What if they still don’t pay? We’d have to turn it over to a collection agency.”

If someone doesn’t pay you your money, especially if you’re a business, you may go to another company who will try to get that money back for you. That company is called a “collection agency” (agency). Now, the problem with a collection agency is that the collection agency will only give you part of the money that they collect back to you because, of course, the collection agency has to make money. Ken says that they will only get “40 cents on the dollar.” That means the collection agency will only give them back 40 percent of every dollar that they get back from the person who owes the company money.

Ken says, “We’ll have to close our doors if we don’t collect.” The expression “to close your doors” here means to close your business, to go out of business. Marjorie says, “Using a collection agency would be a last resort” (resort). A “last resort” is a choice or option that is the least favorable, the one that you least want to do, but if you don’t have any other choice, any other option, then you will do that. For example, maybe you’ve lost your job and you don’t have any money, and you own a car. You don’t want to sell your car, but as a last resort – if you really need money to, say, buy food – you may sell your car. That’s an example of a “last resort.”

Marjorie continues, “I’ll call each of our major debtors and have a talk with them.” “Debtors” (debtors) are people who owe you money, people who have the debt that they have to pay back to you. Marjorie says, “I’m sure they’ll,” meaning these debtors, “they’ll come through.” The phrasal verb “to come through” means to eventually do what you promise to do, to eventually do what you are expected to do. It means to perform as you are expected to perform.

Ken says, “I hope you’re right or we will be the ones asking for credit,” meaning if these debtors don’t come through, Marjorie and Ken will have to go out asking for credit from the businesses they buy things from.

Now let’s listen to the dialogue, this time at a normal speed.

[start of dialogue]

Ken: Look at this list of customers who still owe us money. How is this business supposed to survive if we keep extending credit?

Marjorie: We started doing it because some of our best customers didn’t have ready cash. They’re good for it.

Ken: I know they’ll eventually pay their outstanding debt, but what are we supposed to do in the meantime? We need that cash to buy stock.

Marjorie: We can call in the debt and set a deadline for repayment. We can give those who are really hard up an extension on a case-by-case basis.

Ken: What if they still don’t pay? We’d have to turn it over to a collection agency. We’d only get 40 cents on the dollar, but we’ll have to close our doors if we don’t collect.

Marjorie: Using a collection agency would be a last resort. I’ll call each of our major debtors and have a talk with them. I’m sure they’ll come through.

Ken: I hope you’re right or we will the be ones asking for credit!

[end of dialogue]

Here at ESL Podcast, we certainly owe a debt of gratitude, of thanks, to our wonderful scriptwriter, Dr. Lucy Tse.

From Los Angeles, California, I’m Jeff McQuillan. Thank you for listening. Come back and listen to us again right here on ESL Podcast.

English as a Second Language Podcast was written and produced by Dr. Lucy Tse, hosted by Dr. Jeff McQuillan. Copyright 2015 by the Center for Educational Development.

Glossary
to owe – to be expected and required to pay someone something or do something for someone

* I owe you lunch, since you paid the last time we ate lunch together.

to extend credit – to allow someone to purchase something now and pay for it later; to not require payment immediately

* The furniture store is extending credit to all customers for 60 days in the hopes of getting rid of a lot of inventory to make room for new models.

ready cash – money that is available to spend right now, with no expectations or requirements that it will be spent on something else

* Financial experts recommend having enough ready cash to cover at least two or three months’ worth of living expenses in case you lose your job.

good for it – trustworthy and reliable, willing and able to pay what is owed or do what is expected

* We did the work without demanding a payment upfront because you said the client was good for it, but now we can’t get them to pay or even return our phone calls.

outstanding debt – money that should have been paid, but has not been paid and is now past its due date

* The electric company has a lot of outstanding debt from customers who move away without paying their final bill.

to call in the debt – to demand that money be paid; to ask people to pay what they owe

* The CFO thinks we need to call in the debt if we want to stay in business.

repayment – the act of paying back money that was borrowed

* They were supposed to pay back the full amount of the loan, but the bank agreed to a repayment schedule with smaller payments each month for the next six months.

hard up – struggling; in a difficult and challenging situation, especially a financial situation where one does not have enough money to cover one’s expenses

* After Westley and his wife lost their jobs, they were hard up and had to ask friends and relatives for help.

extension – an increase in the length of time, especially pushing back a deadline to a later date

* Our client gave us a 30-day extension to finish the project.

case-by-case basis – considering the details of each person or situation and making a decision independently for each one

* The university considers students’ appeals of their grades on a case-by-case basis.

collection agency – a company that helps other companies get back the money that is owed to them, usually by calling, sending letters, and visiting to customers who have not paid their bills

* If we do not receive the payment within 90 day of the invoice, we may forward your information to our collection agency.

40 cents on the dollar – receiving only 40 cents for each dollar that is owed, usually because the other 60 cents were paid to the collection agency, or because the amount owed was negotiated down with the customer

* When they closed the store, they had to sell items at just 30 cents on the dollar, but it was better than getting nothing at all.

last resort – one’s last choice and least-favored option, when no other options are available

* The soup is too salty, the meat is burnt, and the salad is wilted. I guess we can order a pizza as a last resort

debtor – a person or company that owes money

* Camilo waited to buy a house until he could pay for it with cash, because he didn’t want to become a debtor.

to come through – to eventually do what one promised or meet one’s expectations; to not disappoint someone

* A lot of people doubted whether James would finish the report on time, but he came through and submitted it just a few minutes before the deadline.

Comprehension Questions
1. Who owes money?
a) A collection agency
b) A debtor
c) A lender

2. What does Marjorie mean when she says, “I’m sure they’ll come through”?
a) They’ll pay back the money that is owed.
b) They’ll be easy to find.
c) They’ll have a good excuse for their outstanding debt.

Answers at bottom.

What Else Does It Mean?
hard up

The phrase “hard up,” in this podcast, means struggling in a difficult and challenging situation, especially a financial situation where one does not have enough money to pay for one’s expenses: “After the accident, we were hard up and couldn’t pay our medical bills on top of our daily expenses.” The phrase “hard of hearing” describes someone who does not hear well: “Please remember to speak loudly, because Grace is hard of hearing.” The phrase “hard feelings” refers to bitterness, resentment, or anger between two people: “We used to fight a lot, but I don’t have any hard feelings toward her now.” Finally, the phrase “hard news” refers to serious news stories about important topics: “Connie reads the advice columns and comics in the local newspaper, but she rarely reads the hard news.”

to come through

In this podcast, the phrase “to come through” means to eventually do what one promised or meet one’s expectations and not disappoint someone: “We could hardly believe it when the governor came through and kept his campaign promises about increasing funding.” The phrase “to come over” means to visit someone at his or her house: “Why don’t you come over for dinner tonight, around 7:00?” The phrase “to come forward” means to offer to help someone: “How many people have come forward and made a donation so far?” The phrase “to come into (something)” means to receive or inherit something, especially a lot of money: “They came into a lot of money when Jan’s parents passed away.” Finally, the phrase “come on” can be used to tell someone to hurry up: “Come on! We’re going to miss our train!”

Culture Note
Vehicle Repossession

“Repossession” occurs when a buyer “defaults on a loan” (fails to pay back a loan as required) and the bank “takes possession of” (becomes the new owner of) the item for which the loan was made. Most often, this is a “vehicle” (car or truck), where the buyer “obtained” (got) a loan to purchase the car, but did not make “car payments” on time or at all.

The laws “vary” (are different) by state, but typically, the “lender” (the institution that made the loan, often a bank) has to provide written “notice” (information about) of “default” (failure to pay as required). There might be a series of two or three letters “advising” (informing) the borrower about the situation and the “potential consequences” (what might happen as the result of something).

When the bank is ready to repossess the car, it usually “turns to” (relies on; requests the help of) a “repossession company.” A “repo man (or woman)” then goes out to the borrower’s address and tries to repossess the car. The laws state that this must happen without a “breach” (violation) of the peace, but the borrower rarely “voluntarily” (willingly) gives up possession of the car, so the repo man must be creative.

The repo man cannot use “force” (physical power or violence), but he can take the car while the borrower is at work or sleeping. The repo man might have a “skeleton key” (a key that opens many locks) or a “duplicate key” (a copy of a key), or might just “hotwire the car” (start a car without a key, by connecting the electrical wires). The repo man can even take the car out of a “carport” (a covered area in front of or next to a home where cars are parked) or an open “garage” (building with a wide door where cars are parked).

Comprehension Answers
1 - b

2 - a