Collection Letters

Collect money owed to you with collection letters ranging from pleasant to threatening. Choose from dozens of model letter templates.

Learn how to write collection letters to escalate your demand for payment.

How to write the reminder collection letter:

The first collection letter should only be a friendly reminder. Assume that the customer has forgotten to pay and courteously invite him/her to pay promptly. Most people will make a payment after a couple of reminders. If there is no response to these reminders, you should assume that the customer is not paying because of financial, medical, or other personal difficulties.

Suggestions for a typical format:

• Send a copy of the original bill.
• Stamp on it Reminder or Past Due and highlight the amount past due.
• Include a short statement indicating the amount due, the due date, late charges (if any), and the account number.
• Make sure the address where the customer should send payment is plainly indicated. Including a pre-addressed envelope for payment (with or without postage) is also helpful.

If the customer has not even made a partial payment after a couple of gentle Reminder Collection Letters, you can send a final reminder collection letter to ask why the customer is not paying. A final reminder letter should explain that there will be consequences for continued nonpayment. If no payment on the amount owed is received, then you will need to take a more aggressive approach in follow-up collection letters.

How to write an inquiry collection letter:

Before you employ any harsher means, try to discover if the customer has extraordinary circumstances that are preventing him/her from making any payment. You can help maintain a good relationship with the customer and go a long way toward collecting your debt if you are sensitive to any potential problems. The Inquiry Collection Letter demonstrates your willingness to help the customer solve his/her current financial difficulty by offering new terms. If you are willing to accept a partial payment now with regular payments after that, most people in financial difficulty will be grateful for this option and agree.

Remember, it is better to collect your money through a series of payments than not to collect it at all. It is also better to work with your customers than to alienate them, because their present difficulties may resolve and they may prove to be more reliable in the future.

Tip for the first inquiry letter: Make a request for prompt payment, and add your willingness to help the customer by offering new terms for repayment.

Tip for the second inquiry letter: Use positive wording, but state firmly that the customer will pay a penalty for continued nonpayment, such as a late fee, a collection fee, or interest on the amount owed.

How to write an appeal collection letter:

If the customer fails to respond to any of the Reminder Collection Letters or to the Inquiry Collection Letters, you must take a more aggressive approach. Because the customer has not responded to date, you should assume that he/she will probably not respond to any further demands for payment. This is why many organizations at this point turn their debtors over to a collection agency. If you do choose to continue the collection process yourself, you can take two basic approaches:

• Positive appeal approach: Try to appeal to the customer's sense of fairness, personal pride, or his/her desire to maintain a good credit standing and its connected privileges.
• Negative appeal approach: If the positive approach is ignored, inform the customer that continued nonpayment could result in various penalties:
  • the loss of his/her good credit standing and its connected privileges
  • the initiation of legal action to reclaim any purchased goods; any services will be discontinued
  • he/she may incur additional debt through collection fees and/or interest on the amount owed

How to write an ultimatum collection letter:

If the customer does not answer any of your collection letters, you can give him/her a final chance to pay. The Ultimatum Collection Letter needs to state the specific action you will take if the customer does not send payment by a certain date. Your statements should be fair, reasonable, and logical. In your last letter:

• First review the history of the account: what the customer purchased, your repeated efforts to collect, etc.
• Give a deadline for payment or for the customer to commit to a repayment agreement—otherwise you will take legal action to reclaim the purchased goods and/or turn the account over to a collection agency.
• Be careful not to use name-calling or to make accusations, which are both illegal. Always be careful with what you put in print! Simply state the facts and explain why his/her inaction is causing you to take action.

If the Ultimatum Collection Letter fails to bring results, be sure to follow through with your stated action.

Note: Debt collection is not an enjoyable pastime, but if you follow these logical steps in preparing your collection letters, you will succeed in collecting payment on many of your delinquent accounts.

Collection Letter Tip

Warning: Do not suggest in any collection letter that the customer might be dissatisfied with the product or service he/she purchased from you.

Need help writing your collection letter? Say it right with professional-quality collection letters. Write with confidence using: Expert help every step of the way Appropriate phrases and sentences Challenging letters made easy You'll get sample collection letters for each of these topics: Write a collection letter Remind a customer that payment is past due Remind a customer that payment is past due (a little more demanding) Appeal to a customer's personal interests to pay an overdue bill Offer assistance to a customer having difficulty paying an overdue bill Demand payment on a delinquent account Announce your intention to take aggressive action against a customer for failing to make payment Write a collection letter You'll also get letters for these related topics and more: Acknowledge payment of an overdue balance Apologize for sending a collection letter by mistake Cancel or withdraw a customer's credit account Inform a customer that the check you received was not signed or the payment was not in the envelope Notify an insurance policyholder of a pending cancellation of the policy Offer a discount for early payment on products or services Promise a delayed payment to a creditor Remind an organization member to pay a fee, duty, or pledge Request additional money or information before you can fill an order Request payment of a personal loan Suggest an alternative plan or schedule for payments Writing a letter can be as easy as 1, 2, 3! Find a collection letter that fits your needs and copy it directly into Microsoft Word or your favorite word processor. Or let our software guide you step-by-step through the writing process, suggesting sample phrases and sentences for each writing step. In minutes, you can write an effective collection letter. Print your collection letter and send it!