Debt Collection Letter Secrets To Getting Paid Quicker

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Writing The Debt Collection Letter
That Gets Results

When you handle your own collections you have to give thought to how to use tools like the debt collection letter efficiently. An effective debt collection letter can be the most persuasive tool in your collection arsenal if you time it right and know the right amount of pressure to put on the debtor at each stage.

First Step: A Gentle Reminder Letter

The first step in successful collections letters is to send a gentle reminder. Rather than a simple "past due" notice, the first set of debt collection letters you send should be a personal letter addressing your client in pleasant terms.

If the letter is worded as a reminder it gives the client a chance to maintain their self-image, but be businesslike and include the date of the first invoice, the amount and when the first payment was due. This information needs to be correct or you can risk having disputes later on if things get more difficult.

Send two letters of this kind spaced approximately three weeks apart. If these fail to work, your next set of letters should be more forcefully worded. Simply state the amount that is due and demand payment upon receipt of the letter, as a debt collection agency would do.

In addition, it's a good idea to present a possible penalty to the debtor, such as late charge, refusing to front them any more products or services until the unpaid bill is taken care of, or reporting the debtor to the credit bureaus.

Don't forget to mention the date of any previous debt collection letter sent. In addition, it can be useful at this point to try to get the debtor to call you to discuss a settlement or payment plan. Any previous phone conversations should be noted in the letter as well. You're building a case on the debtor in case you have to go to court later on.

Know When Its Time To Outsource Difficult Debtors

Although we generally recommend sending only two letters, if you must include a third letter, it should be the one in which you take the kid gloves off. Add a late charge (you can always agree to take this off if the client calls you to work things out) and threaten to hire a collection agency if the payment is not remitted within a set time period. Keep in mind that any debts which go beyond 6 months are statistically much harder to collect on, so you want to time the letters accordingly so that they receive the final letter about a month before the six month period is up.

The debt collection letter is the first party debt collector's best friend if it's done in a professional manner. Rather than treating debt collection as an amateur would, which usually means procrastinating while you do other, more pleasant tasks, learn from the practices of debt collection agencies and your results will be as effective as third party debt collectors. Applying increasing pressure as time goes on and spacing out the letters properly makes your debt collection letter the best tool in your collection arsenal.

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Writing The Debt Collection Letter That Gets Results

First Step: A Gentle Reminder Letter

Know When Its Time To Outsource Difficult Debtors

Writing The Debt Collection Letter
That Gets Results