Debt Collection Letter Format & Example

A debt collection letter is a professional document written with the intent of collecting a past-due debt. Debt collection letters request immediate payment of the overdue balance, provide methods of debt resolution, and inform the customer of the next step in the collection process. Effective debt collection letters provide details of the debt and information on how to pay it.

In this article, you will learn the essential elements of an effective debt collection letter. We have provided a format you can use to write your debt collection letters, as well as a sample letter.

Elements of a Debt Collection Letter

Complete Debt Information

This section of a debt collection letter should contain all applicable information about the debt, including the following.

  • The original creditor
  • The original debt amount and date
  • Fees or interest applied
  • Payments applied
  • Total amount

You can easily insert this information in a table format. We have inserted a sample table in our format below.

Methods of Debt Resolution

Offer as many ways as possible to resolve the debt. Here are some common ways people can pay.

  • Credit card – provide card payment by phone or on your website
  • Check – provide an address
  • Multiple smaller payments – if possible, allow the debtor to pay smaller amounts over time
  • Settle for a smaller amount – many companies accept a smaller payment to resolve the debt
  • Allow an option to discuss payment options

Consequences of Non-Payment

Here, discuss the next step or steps you will take to collect on the debt. Only discuss options you are willing to take. Allow the debtor a reasonable time frame to contact you to work out payment. If you will resort to legal action, inform the debtor in this section of your letter.

Signature Requirement

Neglecting to obtain the debtor’s signature acknowledging receipt of the letter is a common mistake. Be sure you require a signature. This element will be critical if you decide to take legal action to collect. You can obtain a signature by sending your letter via certified mail or by requiring the debtor to sign a copy and return it. Certified mail with return receipt requested is the safest bet for obtaining a signature.

Debt Collection Letter (Format)

){your name}

{company name}

{company address}

{date}

{recipient name}

{recipient company name if applicable}

{recipient address}

Subject: Overdue Account Number {number}

Dear {recipient name},

This letter is an attempt to collect the following debt.

{date}{Original Creditor name}{amount}{total}
{date}{Fees or interest charged}{amount}{total}
{date}{payments made}{amount}{total}
{add rows as necessary}

Please pay the total amount within thirty days of the receipt of this letter. You can pay online with your credit or debit card at {website payment page} or by phone at {number}. Alternately, you can send a check or money order for the total to {address}.

Please contact us immediately at {number} if you are unable to pay the full amount. We are happy to discuss available payment options with you.

If we have not heard from you within 30 days of receipt of this letter, we will assume you are unwilling to pay the outstanding debt. We will take all necessary measures to collect, up to and including legal action. Failure to pay can damage your credit rating.

Sincerely,

{your signature}

{your name}

Sample Debt Collection Letter

Merideth Harrison

ABC

P.O. Box 488

Bravda, NM 89336

February 1, 2032

Jacob Miller

204 South Meridian

Tulsa, OK 74115

Subject: Overdue Account Number 8927633

Dear Mr. Miller,

This letter is an attempt to collect the following debt.

06/25/2031Tangent Custom Designs3500.003500.00
11/30/2031Processing Fees500.004000.00
Payments0.00

We have contacted you several times regarding this debt without resolution. Please pay the total amount within thirty days of the receipt of this letter. You can pay online with your credit or debit card at ABC.com/payment or by phone at (878) 55-6442. Alternately, you can send a check or money order for the total amount of $4000.00 to ABC, P.O. Box 488, Bravda, NM 89336.

Please contact us immediately at (878) 55-6442 if you are unable to pay the full amount. We are happy to discuss available payment options with you. We are available Monday through Saturday, 9:00 to 9:00.

If we have not heard from you within 30 days of receipt of this letter, we will assume you are unwilling to pay the outstanding debt. We will take all necessary measures to collect, up to and including legal action. Failure to pay can damage your credit rating.

Sincerely,

Merideth Harrison

Merideth Harrison

Debt Collection Letter (Word Template)

Debt Collection Letter (Word Template)

Key Points:

  • Include all applicable information about the debt
  • Provide as many payment options as possible
  • Inform the debtor of the next steps you will take to resolve the debt
  • Require a signature acknowledging receipt of your letter

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