how to collect old debts

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how to collect old debts

how to collect old debtsThe wording below was taken from an email that we sent to a patient of one of our clients, a medical practice.

The doctor is a specialist. He wanted to collect an old debt – it was 18 months old. The patient was a 25 year old girl whose Father had been stalling and stalling. The doctor, quite simply had “had enough”. Please bear in mind though that this is the last step of many.

It takes time to get to this stage. But it’ll work. I’ll explain why at the bottom of this post.

This is what we said in our email to the doctor …

  •   * It should be sent by REGISTERED MAIL (makes it more meaningful) – for which you will be charged!
  •   * It’s written to Mary as it is she who is your debtor.
  •   * She will be upset and show it to her Father. If he’s any Father at all, he’ll come to her defence and pay it for her.
  •   * If you think the “discount” offered is too much, please change it to suit. Your call entirely.

This is what I suggest we send …

Dear Ms Smith,

We refer to the recent letter received from Mr Martin Smith regarding the debt of $1,832.00 owed by you to this practice. Records of all conversations and correspondence regarding this matter have now been collated. They clearly indicate that this matter has been previously discussed at some length with both Dr Jones and with Mrs Long.
It appears from Mr Smith’s letter that between us we may not be able to quickly resolve this issue. So, as the practice is no longer prepared to carry your debt on its present indefinite basis, we now offer you two options:

1: Bearing your situation in mind, and strictly on a WITHOUT PREJUDICE basis, the practice is prepared to accept the sum of One Thousand Two Hundred Dollars ($1,200.00) as full settlement PROVIDED THAT that sum is received by the practice by the same date as our last letter, namely, 2.00pm of Tuesday, 26 July 2011.
2: Do not accept the above offer.
Should you select Option 1, the practice will “write off” the remaining balance of $632.00 and consider this matter fully closed with no more money owing.
Should you select Option 2, the practice may commence legal proceedings against you for the full amount owing – $1,832.00. This may incur additional legal costs and the subsequent judgment obtained against you may well be noted on the public record. Enforcement Proceedings can then be taken if the Judgment Debt is not promptly satisfied.
The offer to reduce your account by more than one third may be seen by the courts as more than “reasonable” as the practice is convinced, and records can prove, that our case is more than just. But, please understand, that cleared funds in the amount of $1,200.00 MUST be received by the practice by the above deadline in order for this reduction to apply.
We now leave the future course of this matter entirely in your hands.

So, why will this work?
  1. * It was written to the weakest link – the daughter (nasty, I know, but apart from anything else, for legal reasons, you should always address any correspondence to the party that owes the money even if another party is acting on their behalf – most times).
  2. * It was sent by Registered Mail – went in a plain envelope, the address was handwritten and the name and the reply address on the back of the envelope are ones that are not known to the debtor (curiosity and the “who’s it from, it might be important” factors come into play.
  3. * It offers a discount and later on in the letter it advises her that it’ll be more than the original debt if she doesn’t take up this ‘offer’ to settle by the deadline.
  4. * The deadline is an unusual one – it infers that something’s going to happen after 2.00pm of Tuesday, 26 July! (and it won’t be nice)
  5. * Option 2 tells her “don’t take up the offer”. This’ll sound good to her UNTIL she reads on …
  6. * Paragraph 6 is a cruncher – “legal proceedings”, “Judgment”, “public record”, “Enforcement proceedings” … all very ugly stuff.
  7. * It tells her, twice, that we keep good records. Chances are, SHE didn’t. Case closed.
  8. * The last paragraph is really saying “what happens next is ENTIRELY up to you”.

Bet they do something. 🙂
Wouldn’t you – if it was sent to you?
By | 2019-11-07T06:40:15+00:00 July 21st, 2011|case studies|2 Comments

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.


  1. Rob Masabny May 9, 2013 at 3:05 pm - Reply

    What was the outcome?

  2. michael todd May 10, 2013 at 5:21 am - Reply

    Hi Rob, Thanks for commenting. It was a good outcome … as far as the Medical Practice was concerned. The father was the one who contacted the practice and they agreed to accept $50 weekly (which was all the daughter could afford). The practice also agreed to accept the reduced balance in the offer made in the letter – even though the “deadline” certainly wasn’t kept. A good outcome for THAT situation (it turned out that Dad was unemployed. No cash to help the daughter). Took them about the 6 months to clear it up, but, they did, didn’t miss a beat.

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