How to Write Collection Letters

Nobody likes to deal with collecting unpaid bills, but if your business extends credit, then you are going to have to collect payments for debts that are unsecured. This article explains various types of collection letters. It also details things you can do before you need to call in a collection agency to collect the overdue amount.

Collection letters should absolutely not suggest that the service or product purchased may not be satisfactory! The collection letter should always be for the specific reason of collecting the debt that is due. Send a different type of letter of collection every time you increase your payment demand. The following are several different types of examples for collection letters. Hopefully they will be beneficial in collecting your money.

A friendly reminder should be the first type of collection letter you send. This letter simply assumes that your customer forgot to pay their debt. This letter is a courteous invitation to promptly pay the amount due. After one or two friendly reminders, most customers will make their forgotten payment. If the customer does not respond to your friendly reminder, you can assume that the payment has not be made due to personal, medical or financial problems.

The typical collection letter should include the original bill. Place a reminder stamp or a past due stamp on the letter and have the past due amount highlighted. Write a short paragraph that tells the payment due, when it is due, what late charges will be asses and the number of the account. Plainly indicate the address the customer should use to send the payment. An addressed envelop included in the letter either with postage or without can serve as a helpful way of receiving the payment.

If no partial payment has been sent by the customer after one or two gentle reminders, then you should send a letter that is the final reminder. In this letter, ask the customer why they are not paying their bill. This letter must explain what the consequences for not paying will be. If you do not receive any payment from the customer, you should take an aggressive approach when sending further collection letters.

Try to find out of your customer has had any unusual reasons that may be preventing him or her from paying the bill before you escalate the matter further. Being sensitive to some potential problems can go far towards collecting the debt and maintaining a decent customer relationship. This Inquiry Collection Letter shows your willingness to work with the customer in solving and current financial problems by describing a new term for the debt.

By being agreeable to accepting a partial payment upfront along with regular installment payments after, you will have a grateful customer who will likely agree to the new terms. Not collecting any money at all is much worse than having to collect the money over time through payments. Working with the customers keeps you from alienating them which is important because they will likely resolve their issues and be better future customers.

The first time you send an inquiry letter should request prompt payment while expressing your willingness to work with the customer by changing the terms for repaying the debt. A second inquiry letter should have a positive tone while firmly stating there there is a penalty for not paying including late fees, collection fees, or even interest on the owed amount.


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When customers do not respond to any Reminder letters or the Inquiry letters, an aggressive approach must be adopted. Because of the history of no responses, you can assume that the customer will not likely respond to your further payment demands.

Because of this likely-hood, many companies give debtors to collection agencies at this point. If you continue with the process of the collection the debt yourself, you can take one of two approaches. They are the Positive appeal approach and the Negative appeal approach.

With the positive appeal, you can appeal to your customer's pride, sense of fairness, or a desire to have a good credit score and all the privileges it provides.

When the positive appeal is ignored, let your customer know that if they do not pay, they will incur various penalties such as legal action to get back the goods they purchased, loss of a good credit rating along with all its privileges, or incurring additional debt from collection fees as well as interest due on the owed amount.

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{slide=Collection Letter of Ultimatum} When none of your past collection letters has been responded to by your customer, let them have one final payment chance. This Ultimatum Collection Letter must state specifically what action you plan to take if your customer does not pay by a specific date. The letter must be logical, fair and reasonable.

For this final letter review the account history. Be sure to say what was purchased and what efforts you have taken to collect the debt. Set a firm deadline for your customer to respond to set up a repayment plan or for her or she to pay the bill in full. After this deadline passes, let the customer know that you will pursue legal action to get back the goods as well as give a collection agency the account.

Absolutely do not resort to name-calling or accuse the customer of something because these are not legal practices. Be wary of the words you have in writing. State the simple facts of the case and why you must take action. If this final letter does not get results, you must follow through on your ultimatum.

Understand that collection debts is not enjoyable, but following logical steps while writing the letters of collections will help you success in collecting several of your delinquent debts.

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Collection Letters

6+ Topics (Situations) 29+ Sample Letters Writing Tips Recommendations 500+ Power Verbs 100% Formatted Ready to Use PDF Format

More Than 6 Topics and 29 Letter Samples

• Announce your intention to take aggressive action against a customer for failing to make payment.
• Appeal to a customer’s personal interests to pay on overdue bill.
• Demand payment on a delinquent account.
• Offer assistance to a customer having difficulty paying on overdue bill.
• Politely remind a customer that payment is past due.
• Remind a customer that payment is past due.