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Debt Collection Letter of Legal Proceedings

By: Garry Crystal - Updated: 20 Apr 2012 | comments*Discuss
 
Debt Collection Letter Legal Proceedings

Sending a debt collection letter of legal proceedings is never an action to be taken without thought. This letter should be sent only if the creditor is confident that they can follow with this course of action if or when the time comes.

Intent of a Debt Collection Letter of Legal Proceedings

With the legal proceedings letter comes the end of the threatening debt letters stage. The debt collection legal proceedings letter is intended to inform the debtor that there will be no more warnings. The debtor should be informed that the matter is now in the hands of the legal department. The debtor should still be made aware that court proceedings are avoidable should full settlement of the debt be forthcoming.

Tone of the Legal Proceedings Debt Letter

The tone of the debt collection letter to inform of legal proceedings should be business like but show that the debtor means business. The tone of the letter should be firm and is basically a demand for payment or court action will be taken. In certain cases it could be that the debtor has made some payment towards the account but not enough to satisfy the creditor. If this is the case then the tone can also be one of regret that it has now come to the point of legal proceedings.

The actual tone of the legal proceedings letter will differ depending on the customer account situation. It may be that a customer is a known late payer and the threat of court action will be all that is needed to make them pay in full. If this is the case then the letter should be firm but again give them an opportunity to pay.

Content of the Debt Collection Letter of Legal Proceedings

The content of the letter will again be dependant on the state of the debtor’s account. The basic content will be the notification of legal proceedings, how long the account is overdue and in arrears, and the outstanding balance. There can also be a time period where the debtor can settle the account in full before legal proceedings will commence. Some companies may want to give a final opportunity for contact to arrange a payment plan but this is not always an advisable to be given to continual non payers.

Carrying Out the Threat of Legal Proceedings

There is a reason why it is important for debtors to carry out the legal proceedings if a letter has been sent. There are debtors who will not be swayed by the threat of legal action and will actually view this sort of letter as a bluff. They will wait until legal proceedings have been made before they do pay up. Court action is the next step for non payers and the process should be followed through.

Sample Letter of Debt Collection Letter of Legal Proceedings

Name of creditor
Department
Credit Company Name
Address
Postcode

Date

Debtor name
Address
Postcode

Dear (debtor’s name)

Customer Account No:
Amount Due:
Notice of Legal Proceedings

Your account is now overdue for payment by 70 days and has been passed to our legal department. Despite previous warnings, no payments have been made to this account. Court proceedings will be issued within 14 days from the date of this letter if the account has not been settled.

There will be no further warnings made for demands of payment. Court proceedings can include the additional expense of legal costs and interest being added to the balance of this account.

It is regrettable that it has come to this point and court action is still avoidable if immediate and full settlement of this account is made.

I look forward to hearing from you on this matter.

Yours sincerely

Creditor name

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