Secrets of a skip-tracing expert

Businesses that close suddenly and disappear ("skips") are more common than ever in today's economic crisis.

So we checked in recently with Debbie Chastain, the "go-to" outside collection person used by Zippo Manufacturing ("Here Today, Gone Tomorrow") to learn how's she's approaching the many skips sent her way.

The first thing Chastains asks her clients for when a skip is referred to her is a solid credit application.

"We want some other creditors' names, and we'll talk to them. We want to know who their bank is. We want a copy of a check they wrote, because that tells us what their actual operating account is."

Most applications only ask for one bank reference. It isn't uncommon for companies that habitually bounce checks to list their payroll account on the application because you don't bounce checks there. "You can go to jail for bouncing payroll checks," she points out. "They bounce them in their operating account. We ask for a copy of the check they actually used to pay the client. That's pertinent information."

Small Banks Still a Great Source of Intelligence

She notes that big banks only reveal whether the account is open or closed, how long it was in business, whether the account was acceptably handled, whether they bounced checks, and when the last activity was.

Smaller banks, however, are a different story.

"They know all the gossip," she says.

"On a conversational level you deal with human weakness. They typically tell you if the debtor owned the real estate, if they foreclosed on it and if they've put the debtor in receivership. They'll tell you what the phone number is. They're out of pocket, and they're mad. The big banks don't have any emotional investment. Their egos aren't involved."

She talks to the landlord if the debtor was renting the business location. "If the landlord wasn't made whole and the debtor didn't handle it an appropriate and correct fashion, then the landlord will give us information. And some of the best sources of information I've ever seen are former spouses. They want to dish the dirt. You get his clubs, his phone number and his girl friend's phone number. They'll tell you everything."