So you’ve sent your Letter of Demand- now what?

LOD’s are great. We love them, and despite the rise in digital correspondence and automated reminders, the humble Letter of Demand remains one of your most powerful debt collection tools. There is something very formal, very official and very urgent about receiving a written and signed letter in the post. Your debtors will always take it more seriously than an email or an SMS, so utilise the fact that a stamp only costs $1 and send them liberally. If you do though, and they still don’t pay, there are some very important steps to follow:

1. Follow through on what you have threatened. I cannot stress this enough. If your LOD said you would sue them if they didn’t pay by a certain date, then sue them. Not doing so and giving them another chance will just make you seem weak. If you don’t intend doing it, don’t threaten it. If you are unsure, stick with something more ambiguous like “legal action may be taken” rather than “legal action will be taken”.

2. The expiry date of your Letter of Demand is D-Day. If you send it on the 10th of the month and your letter gives them 7 days to pay, then the 17th is D-Day. Make this day appear to be the most important day in their life at that time.

3. Three days before the LOD expires, email or text the customer reminding them that they only have 3 days left. See number 2 above. D-Day. Emphasise it over and over.

4. Whatever you do, don’t send them another reminder after the LOD has expired. Please, just don’t. The LOD should be the absolute final written request for payment you issue. You can call them though and in fact it’s recommended you do- but just make sure you tell them that as the letter of Demand has expired, you are extremely limited with how much more leeway you can give them without a payment that day.

Cheers guys

So you’ve sent your Letter of Demand- now what?

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