Saturday, July 6, 2013, AM | Leave Comment
Debt collection procedure, requires a debtor to pay the debt amount to the creditor, within a specific period of time. However, sometimes the debtor intentionally or unintentionally ignores the calls or emails made by the creditor. If the debtor keeps on ignoring the creditor, this approach will be considered as intentional action. In this situation, a creditor has the right to issue debt collection letter against the debtor.
What is this debt collection letter?
A debt collection letter is considered an attempt made by the creditor to recover unpaid debt from the debtor. The debtor can be an individual or a company or even government agencies as well.
In most debt collection processes, the creditor first sends a reminder letter at the initial stage. If the debtor ignores this letter, a letter of demand is sent.
All these letters are essential to collect the debt amount and they are referred as debt collection letters. These are a specific written document that proves the creditor has tried different attempts to entice the debtor to pay the due amount, but the debtor has repeatedly ignored the reminders.
This letter of demand comes in a standard format, mentioning the important factors essential in the debt collection process.
This list of factors include:-
The value of the due amount
Documents that describes the debt
An final statement of term to the debtor to pay the amount
Taking legal action if the debtor doesn’t pay the amount within due date.
Apart from these factors, the creditor can also include other factors like credit card payment slip so that the final payment can be processed. Along with this, the creditor can mention the fact that he is ready to accept the debt amount on an instalment basis, only for a particular period of time.
These are the necessary elements, and documents, that are considered as debt collection letters. However, there are few other documents that are not considered under this section.
What are the documents not considered under debt collection letters?
There are few documents which are mistakenly considered as debt collection letters. They are:-
Creditor’s statutory demands
Among these documents, a bankruptcy notice is considered as a debt recovery letter. This document is required when the creditor first takes legal action against the debtor.
Hence, the creditor needs to know these details when he plans to take action against his debtor.
A creditor is required to know is about the expenses involved in getting a debt collection letter.
What is the expense required for debt collection letters?
When you are trying to recover a huge amount of debt, a little expense for acquiring the assistance initially will benefit you in the outcome. Hence, when you decide to opt for letter of demand or debt collection letter, the price you need to pay is very little compared to the money you are going to achieve using this letter.
It might cost you around $15.00 or JMA Credit Controls offer a “Free Debt Collection Letter”. A good debt collection letter does play a vital role in enticing a debtor to pay the debt amount to the creditor.
If you are not comfortable of buying such letter template by yourself, take help of debt collection agencies. These agencies may provide you free debt collection letter. Such letter is found to be quite effective for your case.
Are you planning to opt for debt collection letters for collecting debt from your debtor? Take a look at this article to know what these letters are all about.
Gita Ricca is a financial expert and has been associated with debt collection field for many years. She has written many articles and blogs related to her field of interest. In this article, she speaks about the importance of debt collection letters in debt collecting procedure. She also refers free debt collection letter that to be used for this process.