Don’t Ignore Debt Collection or Legal Letters

Demands from Debt Collectors & Lawyers may lead to disaster. Don’t ignore them!

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Debt Collection Letters

A Debt Collection letter may be the start of a formal process to recover debts from you. Ignoring them won’t make them go away.

If legal action is threatened, it may result in:

A Statement of Claim

A Statutory Demand

A Notice of Winding Up

Debt Collection. Understanding Letters of Demand

Letters of demand are sent when a creditor has tried unsuccessfully to get an outstanding account paid. A Debt collection letter may be the first step towards more serious action such winding up proceedings.

A letter of Demand may be sent by a debt collector or a lawyer and should be acted upon.

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Debt collection efforts usually follow a series of steps. A first and then second reminder letter that may be written in such a way as to maintain a business relationship.

A demand letter, which should be entitled “Letter of Demand” should state exactly the amount outstanding, the invoice details, 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 letter?
  • Is the information in the letter accurate?
  • If you claim late payment interest, is there a legal basis for doing so?
  • 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 and pursuing the 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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