When clients fall behind on their payments, businesses often need to use various methods of communication to reach them. One of the first things you might do is send an email or a physical letter in the mail to the debtor to remind them of their dues. 

While a letter is a great way to attempt to get the debtor to pay up, businesses do need to tread carefully. It is important for the debt collection letter to be professional, to the point, accurate, and all-inclusive. At the same time, the letter should remain friendly in tone, and it should fall within state debt collection regulations.

As you can imagine, it is quite difficult to craft a letter when so many factors come into play. Fortunately, we have some good tips for you below for writing a polite yet firm debt collection letter.

Start With the Facts and Figures

Before drafting the first few lines of the letter, you should gather all of the factual information about the debtor and the due amounts.

Start by getting the client’s full name or the business name. You can also document the client’s address (city, state, and postcode) and write down their contact number.

Next, do a full assessment of the due amounts. Your assessment should include the total debt, information about all payments that have been received, and clear calculations for what is still due.

Mind Your Tone

Most creditors want to recover their debt without losing the debtor as a client. Your debtor might be struggling financially at the moment, but can still become a very supportive and loyal customer in the years to come.

It is very important to always be respectful when you are communicating with your client. The letter you send should be firm, friendly, respectful, and to the point.

Being too soft or overly friendly in the letter also isn’t a good idea. This might lead to continued delays. An overly strict or authoritative tone, on the other hand, can offend the customer and might cause them to avoid contact even more.

Create a Structured Letter

A professional debt collection letter should be properly structured. Here is a quick look at the basic structure of a typical debt collection letter.

• Clear Subject Line

The letter should start with a subject line that tells the debtor what the letter is about. This subject line should be friendly, to the point, and short.  Here are some good examples:

“A Friendly Payment Reminder for -”

“Action Required for Outstanding Balance On Account” 

• Professional Greeting

The subject line is usually followed by a professional greeting. In this greeting, you should try to address the debtor respectfully. It is best to use the debtor’s full name or the company name. 

• Reference to Debt

Your greeting should be followed by a reference to the debt that is due. Here, you should try to include precise information, such as an invoice number or account number, with detailed invoices. The reference section should also include the amount due, the original due date, and the number of days the payment is overdue. You can also urge the debtor to pay up by including a follow-up payment date.

• Offer Payment Options or Support

Creditors are more likely to get their payments if they make it easier for debtors to make payments. You can try to offer alternative payment platforms, list different payment methods, or try to offer a downpayment plan for the client.

• Give Clear Consequences

It is illegal to coerce or threaten debtors. With this in mind, creditors should include clear consequences should the payment fail again. This can include mentions of potential escalation.

• Add a Professional Closing

Finally, you can end the letter with a warm and professional greeting. Remember to keep the door open for communication. You can do this by adding your company’s contact details or by offering the name of a specific debt collector with whom the debtor can communicate.

Consider Help From Professional Debt Collectors

Preparing the perfect debt collection letter can be tough, especially if you are not sure how to properly tone your letter or how to stay within state regulations. 

If you need help writing a debt collection letter, then we welcome you to contact Vic Collect. Our consultants can assist with the drafting of professional correspondence letters or texts. 

An even better option is to hand your debtors over to Vic Collect. Our debt collection team can take full charge of all debtors and will handle all communications on your behalf. With Vic Collect, the chances of getting debtors to pay up are much higher, and your company will be professional every step of the way.

Contact Vic Collect now and find out how we can help your company.