How to do everything better

Entrepreneur, Feb, 1999 by Geoff Williams

HOW TO KEEP YOUR CREDITORS AT BAY

As an entrepreneur, you already know the basic rules promoted by Luis Colon, CEO of the Fairfax, Virginia-based Marcus Group Enterprises Inc., which delivers seminars on staving off creditors: Pay your oldest bills first, treat creditors like people and never let 'em see you sweat. But when your cash flow is threatened, the rules become sketchy . . .

If money is tight, but you're not desperate: Robert Teinowitz, 33, is co-owner of The Spark Factory, an entertainment marketing company in Santa Monica, California. "Some vendors accept credit cards. The trick is to know when your credit card statement closes," says Teinowitz, a regular David Copperfield and math whiz.

The equation: Your statement closes on March 25, and your vendor's bill is due on March 28.

Solving the equation: Transfer $1,000 from your credit card to your vendor between the closing statement and the vendor's due date - say, March 27.

The answer: Your credit card bill, with the $1,000, will show up sometime around April 30 - with the payment due May 24. "Basically, you take a bill issued on February 28 and, without interest, have it due almost three months later," explains Teinowitz.

If you're desperate: We realize that some of the following suggestions aren't 100 percent ethical, but we also know that desperate times can call for desperate measures. Kevin Williams, 26, owns Middletown, Ohio-based Oasis Newsfeatures Inc., which syndicates a cooking column to more than 70 newspapers around the country and has a food line based on its recipes. (He's also my younger brother, I'm proud to say. Well, "proud" may be too strong a word. Read on.) Williams offers the following bases-loaded-bottom-of-the-ninth strategies:

* Send your creditor a check, but "forget" to sign it. This can buy you a few days or even weeks.

* "Some vendors take credit cards, so when you pay over the phone, you can 'accidentally' give them the wrong account number - not somebody else's, but just reverse a digit," says Williams. Eventually, they'll call and usually apologize, saying they wrote down the wrong number. This strategy buys you about three days.

* When collection agencies telephone and ask for you, tell them you're not in. Eventually, they'll stop calling and send you a letter instead, buying you valuable time.

* Change your phone number. But if you're tempted to do this, you are past the point of being pathetic, and you should take the next step:

* Go to the Consumer Credit Counseling Service (CCCS), a nonprofit organization that will help manage your bills and oblige creditors to go after CCCS rather than you. Short of bankruptcy, "It is a last resort, but it's a good last resort," says Williams.

* If collectors are hounding you, send a cease-and-desist letter. "You aren't obligated to the collection agency. You're obligated to the company you owe money to," says Williams. "Never negotiate with the collection agency." Once you send a cease-and-desist letter, insisting that the company stop harassing you, "They are legally required to drop your account," says Williams. "I've done it twice, and it shut them up immediately."