Debt Collection Letter: Samples and Best Practices for Attorneys

As a lawyer, you may occasionally face the struggle of getting a client to pay for your services. Sending collection letters to your clients to request money can be awkward, but it must be done for you to get paid. It can be particularly uncomfortable to forward a client's bill to a debt collector or threaten to pursue legal action.

Regardless of how you feel about the process, writing debt collection letters can help you get your money faster. When the initial step of writing a thoughtful letter and sending an invoice doesn't work, you'll likely need to send follow-up notices and employ other methods.

No lawyer wants to deal with overdue payments or work with a debt collection agency to extract money from stubborn clients, but in some cases, it's necessary.

Debt collection letters serve many purposes. If you need to send one, it will be helpful to learn more about how to write it and how it could facilitate payment.

What Is a Debt Collection Letter?

A debt collection letter, also called a demand letter, is a letter sent to clients who have failed to pay their legal bills on time. Ordinarily, firms send their clients a bill and provide reminders via phone or email as needed. If the client fails to pay their bill even after several reminders, it may become necessary to send a formal debt collection letter. Attorneys may eventually even decide to partner with a debt collection agency.

Sometimes, clients may simply forget to pay their outstanding balances, or life may get in the way of them doing so. Giving them the benefit of the doubt and sending a patient, kindly worded letter to start with can prove successful in many cases.

It's also not uncommon for a client to be going through a challenging time financially following a legal case. In situations like this, legal collections letters can be helpful, as they can provide options to help the client pay their outstanding balance.

When Is It Time to Send a Debt Collection Letter From Your Law Firm?

You may decide to proceed with a debt collection letter once sufficient time has passed and your firm has exhausted other means of notifying and reminding clients of unpaid debts to no avail.

Here are a few of the most common reasons for a debt collection letter from attorney to client.

Your Client Simply Forgot About Their Payments

People make mistakes. Whether it's a simple oversight or your client has been dealing with personal matters, they may have simply forgotten to pay your firm as originally agreed.

In situations like these, it's helpful to have a solid system in place to get invoices paid. Employing certain methods to gently remind clients of their debts allows lawyers to ensure payment while also maintaining good relationships with their clients.

Sending a debt collection letter should never be your first course of action. You should only send a letter if your client's balance remains unpaid after you've given them a sufficient grace period.

Ultimately, the goal is to get the money you're owed for your services. When other options fail, sending a debt collection letter can help you achieve this goal.

Your Clients Found Themselves in a Sensitive Situation

Financial trouble is a common cause of unpaid debts. Your client may have every intention of paying you but not have the means to do so. Many people also feel uncomfortable discussing their financial struggles, meaning they may avoid communicating altogether.

If the client is unable to pay their debt in full at the present time, a debt collection letter may come in handy. You can use your letter to provide suggestions for alternative payment plans, such as installments or pay-as-you-go.

While it's usually better to get one full payment upfront rather than multiple smaller payments over time, it's also better to receive your money gradually than not at all. Showing that you're willing to work with your clients financially also fosters appreciation and a more positive working relationship.

Negotiations Failed and It's Time to Start Legal Operations

Unfortunately, in some situations, clients still refuse to pay no matter what you do. When this occurs, it may be time to initiate legal proceedings. This might entail hiring a collection agency or filing a lawsuit against the client.

If you have no choice but to turn to legal proceedings to collect your fees, it's useful to have proof of the previous efforts you made to get your client to pay, including emails and letters.

What Should Be Included in a Debt Collection Letter?

If you've never had to resort to sending a debt collection letter, it can be tough to know what to include. Generally speaking, you'll want to be as detailed as possible while conveying a polite but firm tone.

An effective debt collection letter should include all of the following:

• The total amount the client owes you
• The original date the balance was due
• Instructions detailing how to make the overdue payment
• The new due date, whether a specific date or as soon as possible
• A message asking the client to contact you should they need assistance paying their debt
• A note instructing the client to contact you if they have, in fact, paid their balance, which can indicate an error in the firm's records
• A warning about what could happen if the client continues to avoid paying their bill

Your attorney collection letter should be clear and concise and leave no room for misinterpretation. To achieve this, make sure you include the following details.

Plain Subhead

The subhead should include your firm's name, mailing address, and contact information, as well as the client's name and contact details. Address the client using their full name.

Debt Amount Details

Clearly detail the total amount due, which may include additional charges like late fees or interest along with the amount of the original debt owed. Break down each individual expense to document your services and avoid possible disputes or misunderstandings.

Clear Context

Provide context for the client's benefit, including details of events in chronological order. By giving clients clear information regarding the amount they owe you, you can ensure that they understand the situation and what's being requested of them.

Specific Dates and Requirements

Give the client a specific date or dates by which their balance must be paid and describe the steps required to complete payment. For example, you might ask for full payment or split a large sum into smaller increments. You can follow the terms of your original contract or specify new terms.

Avoid an Aggressive Tone

When you're first learning how to write collection letters, it can be tempting to adopt a stern or aggressive tone in order to make sure your demands are met. However, this can actually be counterproductive. A courteous, professional tone typically gets better results than a harsh or contentious one.

Sample Debt Collection Letter: Your Reminders

Legal debt collection rarely involves just one letter; depending on your client and their circumstances, it may take several. It's important, therefore, to have multiple letters ready for every stage of the process.

The following are examples of the types of letters that may be involved in the collection process.

First Debt Collection Letter from Attorney

The first step in the debt collection process is to write a letter detailing what the client owes you after their original legal matter has been resolved. As soon as you close your client's case, send them an initial letter and invoice.

Since this is the first communication, you can use a warm tone and friendly, helpful language. However, make sure you're also straightforward and provide lots of details to avoid confusion. Give the client a specific number of days to pay their invoice, or give them an exact date on which it's due — 30 days is a customary period.

Here's a sample letter (debt collection following initial service) to use as a template:

Re: Final Invoice, Invoice #123-001 from [Your law firm name]

Dear [Mr./Mrs./Ms. Client Name],

Thank you for entrusting [your firm's name] with your case.

As your matter is now closed, we have attached your final invoice for our services. Payment is due on [month/day/year]. Feel free to send our office a check or visit the link detailed in the invoice to remit payment if you'd prefer to use a credit card.

Should you have any questions regarding your invoice, please do not hesitate to contact our office.

Thank you.

Second Debt Collection Letter from Attorney

In some cases, a single letter may not be enough. This is where reminders can come in handy. About one week before the payment is due, send a follow-up letter. You can also plan ahead and send a letter that arrives on or around the date the payment is due.

Use this debt collection letter sample to formulate your message:

Re: Follow-up for Invoice #123-001 from [your firm's name]

Dear [Mr./Mrs./Ms. Client Name],

Thank you again for allowing our law firm to provide legal representation for your case. Let this letter serve as a reminder that your payment must be paid by [month/day/year].

For your convenience, we have attached a copy of your invoice to this letter. We accept personal checks, and credit card payments can be made through the secure portal on our website. The link to remit payment is included in your invoice.

As always, we would be happy to address any questions or concerns. Please feel free to contact our office at any time.

Thank you.

Third Debt Collection Letter From Attorney

If the due date arrives and you still haven't received payment, the client's invoice is officially overdue. It may seem as though you're being pesky by continuing to ask them for money, but reminder letters are crucial for making sure you get paid for your services.

At this point, you can try contacting the client by phone. If you manage to get hold of them, remind them they currently owe your firm for services rendered. Inquire about payment and if necessary, help them set up a payment plan. Regardless of whether you speak to the client directly, you'll always want to send a past due letter by mail.

A sample debt collection letter by attorneys looking to guarantee payment after a missed due date might look something like this:

Re: Payment Past Due for Invoice #123-001 from [your firm's name]

Dear [Mr./Mrs./Ms. Client Name],

We are contacting you to let you know that our records indicate you have an unpaid balance with our firm for [$xx,xxx], which was due on [month/day/year]. Thus, payment is now [x] days overdue.

We kindly ask that you contact our office to provide information regarding the status of your payment.

Please feel free to pay by check or credit card using our secure portal. Should you need assistance remitting payment, contact our office to discuss your options.

Thank you.

Debt Collection Letter from Attorney: Final Notice

If the client's invoice remains unpaid for 45 days past the original due date, it's time to alter the tone of your legal collection letters to reflect the gravity of the situation.

While remaining professional and courteous, inform the client that if you haven’t received payment or established a payment plan by a specific date, your firm is prepared to take action against them, such as going to a collection agency.

In addition to your final notice letter, continue trying to communicate with the client by phone and email.

Here's a useful sample debt collection demand letter:

Re: Final Notice for Invoice #123-001 from [your firm's name]

Dear [Mr./Mrs./Ms. Client Name],

Let this letter serve as final notice from our law firm notifying you of your past due invoice of [$xx,xxx], which was due on [month/day/year].

Please be aware that if our office does not receive payment by [month/day/year], we are prepared to initiate legal proceedings.

To avoid such action being taken against you, we ask that you pay your open invoice as soon as possible or provide a status update regarding payment. Please remit payment to our office via check or credit card.

Thank you.

Debt Collection Letter from Attorney: Payment Received

When you finally receive payment from your client, make sure you send them a letter thanking them for their payment. This is the decent and appropriate thing to do, and your client will likely appreciate it.

You should be prepared to send a payment confirmation letter at any point throughout the debt collection process. Ending on a good note will not only make the client want to work with you again but also motivate them to recommend your firm to their family and friends.

Here's a payment receipt template you can use to thank clients after the debt collection demand letter (sample above) has been sent and payment has been rendered.

Re: Payment Confirmation to [your firm's name]

Dear [Mr./Mrs./Ms. Client Name],

This letter is to provide confirmation of your payment in the amount of [$xx,xxx] for Invoice #123-001, thereby satisfying your financial obligations to our firm.

Thank you for entrusting your case to us. We look forward to working with you again in the future.

Before Sending a Collection Letter from Your Law Firm

Before you send a collection letter, you'll want to confirm that you have all the information and resources you need to craft the letter appropriately. To this end, you may see fit to:

• Consult with a Professional If Necessary: If you're unsure how to carry out the debt collection process, talk to a debt collection agency or attorney experienced in this area.
• Make Sure You're Including Everything in the Letter: Consider making a checklist to ensure that your letter includes all of the relevant details and information.
• Create a Title that Catches the Client's Attention: Use a title that communicates the urgency of your letter to make sure the client actually reads it.
• Make the Letter Personal to the Client: Don't type up a generic, cookie-cutter message; instead, personalize the wording to the specific client to encourage action.
• Be Clear and Concise: If your letter is too wordy, the client may not read it in its entirety. Keep it short and to the point.

Using these tips can increase your chances of getting a favorable outcome.

Debt Collection Letters Can Help Achieve a Beneficial Outcome for Attorneys

After you conclude a case, it's time to collect payment. Whether you're sending your initial payment request or the final payment confirmation, the tips outlined here will help you write letters that fulfill their intended purpose, which is to collect debts in a timely fashion with minimal resistance.

At the end of the day, the practice of law is a business. You deserve to be paid for your services, and debt collection letters can help guarantee that you are.

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