This Article Gives Some Tips On How To Write Good Debt Recovery Letters

Category: Finance, Credit.

One of the reasons why a debt goes beyond recovery stage is failure on the part of the creditor to contact the debtor periodically and demand repayment of the debt.

This article gives some tips on how to write good debt recovery letters. It may be due to failure to communicate or improper communication. The first notice to a debtor regarding an overdue debt should not appear to be a debt recovery letter. It is possible that the debtor had failed to keep up the commitment due to sheer oversight after all. It should be written in a friendly fashion, just a gentle reminder, without offending the reader. If no reply is received for the first letter, the second should follow a week later mentioning the details of the overdue amount and requesting payment.

The third letter in the third week should be more persuasive and it should quote any written agreement like an invoice and explain how the delay in payment is affecting your business and your cash flow. You may gently ask if the client is facing any problem for making the payment. If no reply is received even after the lapse of a week, the fourth reminder should state plainly that it would be the last letter with a deadline of a week before the matter is handed over to recovery agents. Finally after the lapse of 4 weeks, if there is no response, you may refer the matter to a debt recovery agent after ensuring that the contact address of the debtor is correct. You may attach a copy of the invoice or any other written proof. Letters should preferably be followed by telephone calls directly to the person concerned, if possible. You should not fail to contact the debtor on the first instance of the debt falling overdue.

You may also take the help of outside agencies for writing debt recovery letters if you don t have the time to do it. More the elapse of time, lesser is the chance of recovering the debt. Email reminders are not treated in the same way as those sent on paper by some people. The reminders should be sent once a week. Emails may fail to get noticed if there are too many of them, occasionally they may fail to reach the addressee. Digitally signed emails have better legal sanctity then ones without signature and they can be retained as evidence in case of dispute later. Hence if there is no response to repeated email reminders, they should be followed by paper reminders.

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