Whenever you issue a debt, always make sure you sign a written agreement with the debtor. This is useful if your debtor fails to repay on time. When debtors fail to pay you on time, you may need to take legal action. For this, you must have proof that a debt was issued. A verbal agreement is not admissible in court as proof.
Sometimes, you give debts to people in goodwill but they may be unable to repay within the stipulated time. This could happen due to honest reasons or in some cases the debtor is dishonest and unwilling to repay the debt. In such situations, it is best to remind a debtor that their debt is due just before the agreed time is over. You may send another reminder about 15 -30 days after the payment date.
If the debtor fails to respond within a reasonable time, you may give a final notice and proceed to take legal action against them.
Here are some sample letters that you can use to notify debtors for due payments:
1- Letter to the debtor requesting payment
Date
Address
Subject: Request for debt payment
Dear [enter debtor name],
I am hereby requesting for full payment of the debt you requested on [enter date]. As per our agreed terms, you were to repay the debt within [enter time in days/months/weeks/years]. The debt is now overdue by two months. I have some financial affairs to attend for which I require the debt amount. Therefore, I am requesting you to make the debt repayment as soon as possible.
Sincerely,
2- Debt collection letter before action
Date
Address
Subject: Notification for debt payment
Dear [enter debtor name],
I hereby inform you that your debt payment is overdue by six months. As per our agreement, you borrowed [enter amount] from me on [enter date]. You agreed to repay the amount within one year. It has now been 1.5 years and the debt payment are still due. Earlier I wrote you a request for repayment of debt as I had some financial matters to take care of. However, you did not respond positively.
Please pay the debt within 45 days of receiving this notice. Failure to comply with the deadline will then force me to take the matter to court and take legal action against you. I hope you repay the debt within the specified time in order to avoid legal action.
Sincerely,
3- Final notice letter before legal action
Date
Address
Subject: Final notice for debt payment
To [enter debtor name],
I am hereby informing you that your debt payment is long overdue. You are requested to repay the indebted amount within 15 days of receiving this notice. Failure to comply will lead to legal action against you.
On [enter date and year] you borrowed [enter debt amount] from me and promised to pay back within six months. It has now been one year and despite repeated reminders, I have not received payment.
Please consider this my final notice before I take legal action.
Sincerely,
4- Friendly collection letter sample
Date
Address
Subject: Request for debt repayment
Dear [enter debtor name],
I am writing with great guilt to ask you to repay the amount you borrowed from me last year. I understand that you have been through a difficult time and only found a proper job last month. Unfortunately, I am facing some financial issues and need to pay my apartment rent for the past two months.
I would really appreciate if you could repay my debt, so I am able to pay off my apartment rent.
Sincerely,
