Tips To Craft Effective Debt Collection Letters

1
Tips To Craft Effective Debt Collection Letters
2
Start your letter with a light note, such as an
airy greeting. For instance, write a brief "Good
day to you, dear customer!" and emphasize how
much you appreciate their continued support of
your services or products in the past few years.
These statements put your debtors at ease before
you run through their debts in detail.
3
Next, be formal and upfront in explaining
specific amounts that your errant debtors owed
you in the letter. Prominently print the numbers
for the principal debt, the total interest
accrued, and extra charges that went to the
collecting agency for their assistance. This
creates transparency and builds up trust between
the debtor and creditor. In addition, using large
text in your demand letter helps debtors with
poor eyesight to better read its message clearly.
4
Identify the dates that the debtor has missed a
payment or two. Also, include the number of times
you've sent reminders and the dates you've sent
demand letters to that person. Emphasize the fact
that those letters have been ignored and the debt
remains in overdue.
5
Clarify the consequences of not paying the debt.
Make sure you state that you're transferring the
collection of their debts to a firm that
specializes in this line of work. Once a debt
collection list has been sold, the debtor will
have to face the consequences of his refusal to
pay. For instance, he may face difficulties in
borrowing money from a bank or a micro-lending
company because of his bad credit line. Mayhap, a
debtor can still get approval for quick cash
loans for a good car, but these close-ended
credits also come with a high price, which is
losing their car and owing another creditor.
6
Show you have your debtor's welfare and best
interests in mind. Maintain a respectful demeanor
as you choose your words throughout the letter.
Do not threaten or deceive the debtor into
thinking you have the power, influence or
connections to make his/her life a living hell.
7
Every debtor wants to see alternative ways to pay
without putting undue burden on their families.
As a creditor, you must make the first step and
offer your debtors a settlement scheme that lets
them pay in a few installments or pay in full at
a reduced lump sum. Specify the dates and times
for the payments.
8
Most debt collection letters give the debtor at
least five days to comply with the request for
full payment. Some letters have a grace period of
only three days. Either way, the debtors must
find ways to pay off the remaining debts for good.
9
You may end your letters with a short farewell.
Invite your debtors to call, text, or email you
directly, or to visit your office immediately
after receiving the letter. Include the contact
numbers for your office and those of your credit
collection agency.
10
Make sure your letter's formatting and background
don't look exactly the same as the legal
documents sent by the courts or government
agencies. Otherwise, you'd get in trouble with
the law. Do not use the logos or seals of these
offices and never imply that you were someone
representing them.
11
Send your debt collection letters via the local
Post Office or an express mail service. You may
send your Demand Letter with a prepaid stamp for
debtors to reply to you without paying postage
fees.
12
TROVEWORKS
Troveworks offers an accounts receivable solution
that will help in streamlining your cash flow.
troveworks.com