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9 Steps to solve a conflict

3 min read

October 22, 2019

9 Steps to solve a conflict

Working on the management of distressed debt requires, first of all, the awareness that one works in an area where the interests at stake (the ones from the creditor and the ones from the debtor) always seem to be, inevitably, in conflict.

Our task is already hard enough without running into debtors that argue with you or refuse to answer to your contacts.

Avoiding conflicts is always desirable, but sometimes they seem to be inevitable. So, what do we do when facing a conflict?

1. Recognize the conflict/problem and acknowledge your participation in it

You can never solve a problem if you don't acknowledge that it exists.

Sometimes conflicts occur not because of one person being right or the other being wrong. Instead, it is just a matter of varied perception that creates disagreement.

It's easy and quick to point fingers at the other party. However, no matter what happened, the conflict will never be resolved if both don't recognize they play an active role in it.

Therefore, always make sure that you note a conflict is occurring, understand the problem and the underlying issue, and assume your part and your responsibility in it.

2. Use conflict as an opportunity

Always bear in mind the importance of taking on the role of intermediary between the problem and the solution.

You will have a chance to change the debtor's view of you and your work and will overtake the conflict with a much stronger relationship.

3. Listen

Do not make assumptions. Ask questions so you can gather all the information you need to understand what happened. When you ask questions, commit to listening with the intent to find a solution. Empathy signals that you are willing to understand the situation. Ineffective communication is itself a factor of conflict.

4. Put yourself in other shoes

Analyze the situation from debtor's point of view. If you are able to understand it, you will be better enabled to look for solutions that fit the expectations of both your client and the debtor.

5. Develop a plan

List any possible setbacks that may occur during the process and think of solutions for each one of them. Keeping your solution to the most obvious problems up your sleeve helps you at the moment they arise because you quickly come up with multiple solutions. Have clear, compelling arguments and look for the best way to use them.

6. Be positive and assertive

Make it clear that you are not looking to extend the conflict or the debtor's dissatisfaction but, on the other hand, looking for a compromise solution.

Stick to the issue and try to solve it as quickly as possible, so you can convince the debtor to an agreement solution. Pointing out and insisting on all the things that went wrong, is likely to just aggravate the conflict and delay its resolution.

7. Agree

Make sure you establish and tag the exact issue that needs to be resolved and get the debtor's acknowledgment on it. State your concerns, review alternatives, and seek common grounds.

8. Set a solution

Solutions that you propose may appear biased to the debtors, hence the importance of strategically appear to be on their side.

Adopt a win-win strategy to gain cooperation and reach a solution that both can agree upon, with or without concessions. Explain in detail what will be your actions to solve the problem, but make sure you only commit to the customer about the attitudes you have the authority to take. Do not promise what you cannot keep.

9. Confirm that your message was understood

Finally, with the proposed conflict resolution, ask questions to confirm that those measures are in line with debtors' perceptions and expectations.

Show your committed to the solution, and confident with the debtor's commitment.

Last, but not least, make sure you pass the message that you are always available.


João Ildo
João Ildo
Team Leader Legal