You don’t need a lawyer to write a good collection demand letter. Save your money and write your own collection demand letter following these recommendations.
Know who to send the letter to. The accounts payable clerk doesn’t have authority to pay. Send the demand letter to the business owner, CEO or President. Always make it difficult to ignore the demand. Send by multiple means. A letter sent by mail can also be either attached to an email or incorporated into the email. A fax version can also be sent together with the email and hard copy. A text picture is another way. The more persistent you are, the more likely you’ll get noticed.
KISS. Keep it Short and Simple. “Payment of $xxx has not been received”. Don’t let them make you jump through hoops or force you to play the “go fetch” game. Attach a copy of the invoices, billings, statement of account or other document that shows the balance.
Don’t give extended terms. Shift the burden. For example, say “If the payment is not received within ___ days, we will understand that as your invitation to (alternatives) suspend your account or refer this matter for collection action”. Debtors don’t invite you to come after them often. They will deny and deflect but not invite.
Remind your debtor of other consequences. If your contract, credit application, invoices or other documents provide for prevailing party attorneys fees recovery, mention that in the letter.
Some content doesn’t belong in a Collection Demand Letter. For example, don’t whine. Recitations of how many times you called, wrote, sent information or bills, exchanged promises by email, etc. don’t move you closer to getting your money. Generally the debtor takes it personally and adds that to a reason not to pay.
Similarly, Don’t insult. Telling a debtor he is dishonest, broke his word, is a scoundrel, etc is counter productive. You don’t like being insulted and neither does the debtor. Generally an insult is a rationalization for allowing a debtor to ignore you from then on. Also don’t threaten disparagement, reports or charges.
Don’t offer a compromise quickly. As soon as you suggest you will take less than the amount owed, the debt becomes a negotiation. If there is a compromise, let the debtor suggest that. Finally, if your demand letter doesn’t work and all you phone calls have not worked, don’t wait. Bad debt is not fine wine. It doesn’t get better with age.
If your debt is in California, is a commercial debt over $10,000 and you want recovery, consider our website at www.collectionlaw.com. Your no obligation phone consultation is just moments away.