Don’t Ignore Debt Collection or Legal Letters

Letters from Debt Collectors or Lawyers may lead to disaster. You can’t afford to ignore them.

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Debt Collection Letters

A Debt Collection letter is the start of a formal process to recover debts from you. Unfortunately, ignoring them won’t make those demands go away.

If legal action is commenced against you, it may result in:

A Statement of Claim

A Statutory Demand

A Notice of Winding Up

Debt Collection Letter. Understanding Letters of Demand

Letters of demand are normally sent when a creditor has tried unsuccessfully by other means to get an account paid. A Debt collection letter is the first step towards more serious action such as legal action.

A letter of Demand can be sent by yourself, a debt collection firm of even a lawyer.

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Typically, debt collection will follow a series of steps. A first and them second reminder letter. These letters can be written in such a way as to maintain a business relationship.

The demand letter, which should be entitled “Letter of Demand” should state exactly the amount outstanding, the invoice details and the fact that the amount is overdue and that it needs to be paid within a certain time frame.

The letter may also suggest or warn that unless the debt is paid by a particular date, legal recovery action may be commenced.

Sending a letter of demand can be a significant step as it may damage a business relationship and may inflame a dispute. This needs to be considered when taking steps to recover a debt.

Debt Collection and Lawyers letters

Often a lawyer’s letter will attract the attention of a debtor more than a simple letter of demand from you .

While there is a cost to engaging a lawyer, it will indicate to the debtor that you are serious about recovering the debt and are now prepared to spend money on this issue.

As noted in the points above, if a Debt Collection letter is ignored, it can lead to more serious consequences.

Debt Collection Letters Checklist

  • Have you attempted to recover the debt with a simple phone call or pleasant reminder letters?
  • Is the information in the letter accurate?
  • If you claim late payment interest, is there a legal basis for claiming that?
  • Have you indicated a date by when you expect the amount will be paid?
  • Have you foreshadowed the recovery action that will follow for non-payment?
  • Is the language of the letter business like and not personal or threatening?
  • Have you signed and dated the letter?
  • Have you attached copies of all supporting documentation and evidence that you will rely upon in making pursuing your claim?
  • Have you kept a copy of the letter and all supporting documentation?

Note: Consider sending the letter by registered post and requesting a ‘signed proof of delivery’ card.

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