Debt Recovery Letter

Formats:

Overview

Use our Solicitor drafted debt recovery letter template as a final demand for payment of a debt.

• 72% of debt recovery matters actually settle on the issue of a final demand for payment.
• Drafted by Debt Recovery Solicitors in plain English and easy to customise.
• Includes Late Payment of Commercial Debts Regulations interest claim wording.

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Debt Recovery Letter

The debt recovery process exists to protect you and your business when debts occur. There is a four step process that a business can use to try to recover the money owed before entering into a court proceeding. Court proceedings can be expensive and take up your time. By following the debt recovery process you have a better situation to show the courts. As the creditor who has sent out the documents asking for payment you can show your control of the situation and all reasonable attempts you have made to recover the money on your own. A court is more likely to award you the money owed if you have gone through this process rather than moving directly to a court proceeding.

There are four steps in the recovery process with the Debt Recovery Letter being the final phase. The Debt Recovery Letter will provide a final demand for payment before you seek a court date. In fact the letter is explicit in what will happen if the debtor refuses to acknowledge or make payment regarding the debt.

The documents you send out will show the court that you have sent at least two written requests previously for payment. If you use a Debt Settlement Letter to try to negotiate with the debtor you will also have this paperwork to give to the court. The Debt Settlement Letter will show that you were willing to negotiate and that the debtor refused to acknowledge the help offered. The other two documents are the Debt Reminder Letter and the Late Payment Chaser Letter.

In the Debt Recovery Letter you can demand interest to be paid along with the full amount of the debt. The Late Payment of Commercial Debt Regulations 2002 law states that interest can be awarded of up to 8 percent of the amount owed. The interest is accrued from the date the payment was due, not on the date of the final demand. The interest can act as a good incentive to encourage the debtor to pay before it accrues more. However, before you can claim any interest you have to state your intentions to the debtor in the Debt Recovery Letter. The Debt Recovery Letter template will have a small area dedicated to the interest you might wish to gain.

Our Debt Recovery Letter template is customisable. You can take out information like the interest added onto the debt if you wish. You do not have to ask for interest. You can also make changes to other parts of the letter if they need to be more specific regarding your current circumstances with debtors.

You do have to give the debtor ample time to repay the debt. Like the first two letters and the Debt Settlement Letter you might send, you will need to give at least a week for the debtor to comply before you enlist the courts help. You want to save your company money from a claim and time, so allow for the debtor to answer your request.