Four steps exist as part of the debt recovery process. The third step in this protocol is the Debt Settlement Letter. The Debt Settlement Letter is used after the Debt Reminder Letter and the Late Payment Chaser Letter. The first step is a friendly yet firm reminder letter that the client has missed their due date and you expect payment in seven days or even up to two weeks; that choice is going to be yours. The second letter is firmer in asking for payment, even to the point of stating if the client does not contact you, you may take the matter to the courts.
The Debt Settlement Letter can be used in two ways. The letter can be used by the client in answer to your two other letters. They may state their issues in making payment and ask for a settlement. In the letter it can state what they are able to pay and when. It is a great opportunity for an out of court settlement which saves you and the debtor money.
You are able to send out a Debt Recovery Letter stating clearly what settlement you are willing to make in order to obtain all or part of the funds owed by the debtor. It shows that you are willing to work with the client in the event they are having issues paying you. It basically opens the door to begin talking again.
The Debt Settlement Letter has been drafted by a specialist solicitor to ensure it is legal, clear, polite, and firm. In 72 percent of debt claims litigation is not involved because the debts are settled with the Debt Settlement Letter.
By using the template available here you are able to manage your creditors or debtors with ease. The Debt Settlement Letter is mostly used by the debtor to make arrangements with the creditor. The template provided here is a general form.
As a general form it has some information regarding your desire to seek a settlement. However, you can customise the letter to be more specific regarding the circumstances you find yourself in. You can modify it to state your exact intentions and ask for the creditor or debtor response.
The downloadable template can be reused any time you feel your debts are beginning to get out of control. The Debt Settlement Letter can be used by the creditor as a third step, and can be used by a debtor in response to receiving a Debt Reminder Letter to negotiate the terms of repayment to the creditor.
It is considered the third step only because the creditor can use it after sending out the first two letters, and quite often the debtor waits until they have received the Late Payment Chaser letter to respond.