Comments Off on Free Debt Collection By Using a Termination Letter

You can collect about ten percent of your aging unpaid bills. You can do it with almost no effort and without paying a Debt Collection Agency a penny.
At some point, after you have tried phone calls, faxes, emails and letters, you determine that the customer needs to be sent out for debt collection. You know you are spending too much of your time and energy on what seems to be a losing effort. This is exactly the time you should break out your Termination letter.
The Termination Letter is a direct statement to your customer that you have reached the end of your rope. Either they contact you with a payment plan or you will proceed against them without further notice. Be sure to let the customer know you are serious. Tell them that on (Specific Date) their unpaid bill will be sent to (for example) Executive Credit Management, Inc.
Tell the customer that your Company has a hard and fast termination policy. For example, any unresolved bills over 90 days past due MUST be turned over to Debt Collection with approval for immediate litigation. After a given date they should contact the collection agency.
Note that you don’t want to sue but the customer is leaving you no alternative. Give the customer about 10 days to respond if they want to avoid this process.
Ten days is a good time limit. If you don’t give enough time, they may not answer before you have taken action. If you give too much time, the letter is not considered urgent and often is not addressed.
If you leave the door open for ten days, some of the customers receiving the Termination letter will call you to work out a payment plan. These are customers you probably will want to keep. If they don’t respond they aren’t going to give you their business anyway. They are either financially distressed or are angry.
Either way, you know the score. For those who call, you may still have a customer. If they don’t, you don’t have to waste any more of your time. In the process, you will also get paid.