Bad Debt Letters

More About Bad Debt Letters

office cartoon about sending collection letter

Bad Debt Letters, What? Why? Who and How?

What Is a Bad Debt Letter?

A bad debt letter is a formal communication sent by a creditor, or a collection agency or attorney, hired by a creditor, to a debtor, requesting payment of an outstanding debt or invoice that has not been paid according to agreed-upon terms.

A bad debt letter might also be called a demand letter or a collection letter. There are 1st party demand letters also known as In-House letters and 3rd party collection letters. In-house or 1st party letters are sent by the creditor, 3rd party demands are sent by a debt collection agency, attorney or other 3rd party acting on behalf of the original creditor.

First party or in-house demand letters typically serve as final notice before further actions such as third-party debt collection or legal proceedings are initiated.

Why Send a Bad Debt Letter?

A bad debt letter is one of many tools available when attempting to collect unpaid debt. Whether you are collecting overdue invoices, medical debt, past due rent, contractual payments or any other kind of bad debt, the collections process is essentially the same.

Start low key, with email reminders and statements. If your customer, patient or tenant is unresponsive, escalate to collection calls. If that doesn’t work, move on to in-house collection letters and finally bad debt collections and third party letters sent by either a collection agency or attorney.

Your last resort in the debt collection process is to file suit and obtain a court-ordered judgment.

Who Can Send a Bad Debt Collection Letter?

Whether you are a small business, freelancer, professional office, landlord, or a property management company, you as the original creditor can, and should send one or more in-house collection letters before turning to a third-party collection agency or attorney. We outline our complete accounts receivable system here, with everything we believe you should do before turning to a debt collection agency, even us.

Of course you can always hire us to do it as well. You can read more about our outsourced accounts receivable system here.

A third-party collection agency hired by the original creditor (that’s you) to recover the outstanding debt, or an attorney can send a series of more formal, and typically more threatening demand letters. While third parties like debt collection agencies are regulated by the FDCPA their letters are often more authoritative, and therefore more effective than in-house letters.

How it Works if You Use Us

We will send a series of time-tested and effective 3rd Party Debt Collection letters to any valid business or consumer debtor.  Packages include collection calls and consumer credit reporting when possible. All payments sent directly to you, you keep 100% of money collected. 

Invoice stamped Paid

We call this Flat Fee Debt Collection. You get all the benefits of a traditional collection agency without the high cost and loss of control. You get the leverage of the collection agency but all the payments come directly to you.

For a nominal fee you submit your account online. We generate and mail the collection letters. If the amount due is not paid promptly, the account will be placed on the debtor’s credit bureau report, where it will stay for up to seven years.

Your debtor is instructed to send payments directly to you or to contact you to make payment arrangements.  You can withdraw any account at any time. You maintain complete control at all times.

And, best of all, when you get paid you keep it all.

You retain 100% of the money collected!  Contact us for Custom Solutions at 800-201-2274.

Shameless Pitch

If traditional collection agency tactics and fees (30% to 50% of the amount collected) aren’t for you, you are in the right place.  Times have changed!  Rude and unprofessional collectors working for high commissions are a thing of the past.  And that’s a problem for small business!

Big agencies want big accounts and they want lots of them, so they can make lots of big commissions. 

What hasn’t changed is your need to be paid on time. 

Whether you have 1 account or 100 accounts, big or small – we’re here to help and unlike a traditional collection agency:

  • It won’t cost you 30% to 50%
  • You can pull back any account at any time
  • Includes skip tracing
  • We don’t bully your customer (though we are firm)
  • Online reporting 24/7

AND – We’ll talk to you!  We don’t disappear as soon as you place your account.  We answer the phone live all day and we’re happy to discuss your account with you before AND after you place it.  But remember when we’re talking to you we’re not talking to them, and there are only so many hours in day. 

The Catch

You know it’s there so we might as well talk about it sooner rather than later.  We can’t guarantee collection of your account.  Debt collection services aren’t magic.  We’ll do everything we can but if your debtor has a legitimate dispute or you KNOW he’s a deadbeat and never pays anyone you’re better off moving on –

Not sure? Give me a call at 800-201-CA$H (2274) my extension is 110 and I’m happy to talk to you.