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Collection letter for past due invoices for Sales

hi everyone i'm albert from etactics and today i'm going to give you five easy steps to write an effective debt collection letter before we get started make sure that you subscribe to our youtube channel by clicking the button below also hit that alert bell icon so that when we post new and helpful content you'll get notified [Music] before you do anything with debt collection letters you need to understand legal restrictions due to the sensitive nature of the collections process the government passed the fair debt collection practices act fdca to protect individuals who owe a debt fdca exists to limit the actions of third-party debt collectors it doesn't affect organizations that provide a product or service that's beyond debt collection debt collectors can't contact debtors at inconvenient times unless they're told by the debtor that it's okay may send letters emails and or text messages to collect a debt can attempt to reach debtors at home or work cannot contact debtors at their place of work if requested not to must provide validation notice within five days of contacting a debtor of course there's more to the law than those five requirements but you get the idea the second step to writing an effective debt collection letter is to know what to include the most important aspect to keep in mind when you're writing your effective debt collection letter is the content you include at this point in the process you've probably already sent past due and dunning letters which might make this section seem obvious but there is some more minutia involved in drafting your letter than including how much money the debtor owes and calling it a day the ultimate goal of your collection letter is to collect but that's a lot harder than it sounds you see you also need to cover certain topics like information about your organization and why you sent the debtor the letter more specifically you need to include an identifying subheading your subheading should include identification information including company name logo mailing address phone number and date address the problem in order for the debtor to agree that they have an outstanding balance with you you need to address the problem explain why you've reached out to them and most importantly include proof regarding the debt in question this is also the appropriate place to refer back to any contracts or agreements that are in place debt amount details the main reason why you sent the letter in the first place include the dollar amount of the debt owed the original due interest gained and or additional fees accrued sometimes there might be multiple subaccounts or amounts involved with a debtor don't forget to include those as well context explain additional steps that the debtor could take to help alleviate what they owe you if you're allowing a minimum payment amount or installments you need to make sure that it exists within your letter a deadline clearly state the new due date of the outstanding balance and or when you expect to hear back from the debtor and a call to action let the debtor know what happens if you don't receive a payment or response by the deadline by the time you've added all those specific sections you'll have an effective debt collection letter third you need to watch your language the language you use throughout the debt collection letters you send is the second most important aspect if you come off as threatening and aggressive you're not going to see much success you see the data points you include are only half of the debt collection letter puzzle piece you also have to motivate your client who hasn't paid you to satisfy their debt with you the moment you use aggressive language the chance to motivate goes out the window so what should you do instead use professional language be specific and keep a record of everything fourth create a template it would be great if you only had to write and send out a debt collection letter once every few months or so but that's not realistic unfortunately outstanding bounces aren't uncommon depending on which vertical your organization is in they could be an everyday occurrence over 65 percent of all u.s bankruptcies are due to medical debt the average debt per 2021 college student upon graduation was 31 100 the average american mortgage loan debt was 208 185 in 2020. almost 10 of outstanding auto loan debt is at least 90 days late with just four statistics you can see how debt collection is standard practice across multiple industries since that's the case it means that it's also a bit of a time sync once you have the language of your letter down the only parts of it that need to change are the data points and evidence everything else can stay the same so send out a few different debt collection letters to your first few debtors turn whichever one sees the highest success rate into a template fifth and finally use innovative alternatives sending a letter in the mail is a tried and true method of collecting outstanding debt but there's one main problem with using the standard letter and envelope method american households receive 940 pieces of mail per year based on that statistic what are the chances that your client sees the one standard size debt collection letter that you sent to their house less than one percent i know what you're thinking after going through all of this detail about explaining how to write an effective debt collection letter is this guy really trying to talk me out of it no i'm simply leading up to the point of this section out of everything that exists though the most effective debt collection mailing alternative is postcards 53 of recipients claim they read mail sent in a postcard format so send postcard debt collection letters by the end of this video you know the key data points that you need to include in your debt collection letter the type of language you should use how to create a reusable template and innovative mailing alternatives that exist in other words you're well equipped to take on the responsibility of motivating your debtors to satisfy the balance that they owe you whether you're a third party agency whose sole purpose is collections or an organization with a lot of clients who have outstanding balances knowing how to write an effective debt collection letter is an essential business practice if you'd like to learn more about effective debt collection letters reach out to e-tactics and since you've already made it this far in the video you might as well like it share and comment below