Debt Recovery Letter

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Process for Debt Recovery Letters Online

3-step Easy process to send Debt Recovery Letters to the Defaulting Debtor:


Login to our website and visit to the Form for Debt Recovery Letters.


Fill in the details of unpaid Seller, defaulting Debtor, Details of Invoice - Invoice number, amount due and few other questions.


Our well-versed lawyers will work on drafting the Debt Recovery Letters for you and the draft having all the required details will be ready for you to download.

You will get the Debt Recovery Letter Template in an editable format so you can always edit the Notice as per your requirement.

Debt Recovery Services

Debt Recovery Letter Steps - LegalDocs

3 Letter System for Debt Recovery

In trade and commerce, selling and purchasing goods and/or services on credit is a common practice. But getting the credit amount paid on the due date is very uncommon. It can be seen very often that most of the persons do not get the credit amount paid on time, but due to their relationship with clients or some or the other reason, they find it awkward to call such purchaser or send reminders for money repeatedly. However, sometimes such purchasers hold on the due payment till the supplier make calls or send them reminders for payment. It can also be seen that the persons who keep stringent payment policies and keep taking follow-ups on the receivable payment are more likely to get paid on time.

But, at times, you might meet a purchaser who is too stubborn to not to pay on time or who might keep giving reasons every time to get an excuse from paying every time it is asked for.

In such situations, where your client is holding on to the credit and not making due payments or clearing bills even after repeated reminders, you can opt for debt recovery services, which is also commonly known as debt collection service, by sending them the “Debt Recovery Letters”.

When shall the Debt Recovery Letters be sent?

If you are facing a problem in collecting the unpaid money from your client, you can choose to send them the Debt Recovery Letters, also known as Debt Collection Leter, one by one, depending upon the response from the client. You can send 3 debt recovery letters to the client, every next letter being more impolite than the earlier one.

If you cannot collect the whole due amount till the due date given in the Final Debt Recovery Letter, you can proceed to initiate Legal Proceeding against the defaulting Debtor.

How do the 3 Debt Recovery Letters differ from each other?

First Debt Recovery Letter is sort of a polite nudge. It is basically a reminder to the client that they are late in their payments and should act upon it. If no action is taken by the client, the reminder becomes harsher and the actual price is increased with each next reminder i.e Debt Recovery Letter due to additional charges which include interest and penalty for delayed payment. The final Debt Recovery Letter also specifies that if the amount is left unpaid on the due date specified therein, a legal proceeding could be proceeded by the Creditor.

Debt Recovery Process:

If the situation demands, you can opt to send Debt Recovery Letters to the purchaser who is liable to pay some outstanding amount. Following is the process of sending Debt Recovery Letters:

There are three letters which shall be sent one by one depending upon the response of the debtor/purchaser. You can find these Letters on our website -

  • The First Reminder letter is a gentle reminder of the credit amount payable by the purchaser. It is addressed to the purchaser and specifies details of the purchased product(s), date of purchase/date of the unpaid invoice, the amount due, the due date for payment and other such basic information. A new due date is specified in this letter on or before which the purchaser is expected to pay the unpaid amount. you can find this debt recovery letter format on our website -
  • If the purchaser fails to pay the amount on the date as specified in the First Reminder Letter, the creditor shall issue the Second Reminder letter addressed to the same purchaser. It is less gentle than the first reminder. It shall specify the policy that the seller/creditor has adopted to inculcate in case of delay in payment of debt. It could be interest rate applicable on the unpaid amount, delay of specific days after which the agreement between the purchaser and seller might end and likewise, besides the details specified in the First reminder letter. You can find this debt recovery letter format on our website -
  • Even the Second Reminder Letter remains ineffective and no money is recovered till the due date specified in the Second Reminder Letter, the Third & Final Reminder Letter shall be sent to the defaulting purchaser which shall specify a new due date on which if the purchaser does not pay off the debt, a legal action will be taken by the seller/creditor. This letter also specifies the details as specified in the First Letter of Reminder, and reference is also given to the Second Reminder Letter. You can find this debt recovery letter format on our website -

If the defaulting purchaser again fails to respond to the Final Reminder Letter, a legal proceeding could be initiated against the defaulting purchaser by the unpaid seller.

Laws governing Debt Recovery in India

There is no law that limits the Creditors or debt collectors from collecting the debt due to them. The law says within what time the action shall be taken by the debt collectors but there is no limit on taking continuous attempts for recovering the debt. If the debt remains unpaid, the unpaid creditor/debt collector can pursue indefinitely for the outstanding balance unless their debt is fully settled.

Is there a time-limit for Debt Recovery?

The Debt Recovery for a Company is governed by the Insolvency and Bankruptcy Board of India (IBBI) inline with a new act named as ‘Insolvency and Bankruptcy Code, 2016. Earlier, Debt Recovery Tribunal, a Quasi Judicial Body, use to deal with the Debt Recovery Cases. Now, as per IBBI, such cases are presented in the National Company Law Tribunal (NCLT).

Legal Effect of non-payment of debt:

If the defaulting debtor is incapable of paying off its debts, even after numerous efforts from the debt collector, the debt collector may have it discharged in bankruptcy i.e. the debtor might be declared Bankrupt/Insolvent and the debt amount would be collected from its assets, etc.

Legal effect of Oral Contract in Court:

Only because there is just a Oral Contract and no written contract between the parties, it doesn’t mean that it will not be taken care of by the court. A court will look at all transactions and performance leading up to the date of dispute and award a remedy accordingly.

Thus, it can be said that oral agreements are equally honoured as the written agreement. However, oral agreements may be harder to prove

Also, for a contract to be a written contract doesn't mean that it shall be on papers. If your email or other letter communications satisfy the basic contractual requirements of offer, acceptance, and consideration, and no other legal issues prevail, you might still have a valid contract.

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Debt Recovery Letters FAQs

Difference between Debt Collection and Debt Recovery

Debt collection as the name itself implies means simple collection of the money on the date when it is payable. Whereas, the term Debt Recovery is used in case of Bad Debts i.e when the collection of unpaid amount has become difficult and there is hardly any way left other than a legal way.

Can these debt recovery letters or reminder letters be used in court?

Debt Recovery Letters are the proof of the efforts taken by the debt collector to collect the outstanding debt. Often in case of small claims, court wants you to make a request for the due payment before initiating a court proceeding. Thus, these letters have validity in the Court.
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