A Final Warning Letter Before Legal Action is a final request for payment before an overdue debt is turned over to an attorney to begin legal proceedings. A final warning letter is also called a final demand for payment. The purpose of this letter is to inform the debtor you are prepared to take legal action if the debt is not resolved within the given deadline.
This letter is the last step in a series of attempts to collect a debt before resorting to legal action.
When to Send a Final Warning Letter
This letter is generally sent to a debtor when their account has become delinquent and they have made no effort to resolve the debt. Before sending this final warning letter, you need to have proof that you have contacted the debtor several times and provided payment options. The collection letters you have sent to the debtor form this important documentation.
Use a basic format for final demand letters to ensure consistency throughout your company. Consistency in your communication provides important documentation of your case if you are required to pursue legal action to collect a debt.
Always print professional letters on your company letterhead. Send your letter by certified mail so that you have proof the debtor has received the final demand for payment.
This article discusses the important elements that should be included in your final warning letters. We also provide a basic format for a final warning letter and a sample letter so you can see how the basic format is used.
What to Include in a Final Warning Letter
Be sure to include the following information in your letter:A statement that this is a final warning letter before legal action
- The total amount of the debt
- The deadline for payment of the debt
- A statement that you have repeatedly requested payment
- A deadline for paying the amount due
- Options for paying
- Contact information
- Consequences of not paying by the deadline
Many collection companies offer a discount on the total amount if paid before a set deadline. You may include this discount if this offer has not been included in a previous collection letter.
Final Warning Letter Before Legal Action
Here is the basic format for a final warning letter before legal action.
{date}
{recipient name}
{recipient address}
RE: Account Number {number}
Dear {recipient},
We have repeatedly requested payment of your delinquent account in the amount of {amount}, and we have not received a response from you.
THIS IS YOUR FINAL WARNING.
This letter serves to advise you that if we do not receive payment in full within ten (10) days of the date of this letter, we will immediately turn your account over to our attorneys, who will begin legal proceedings against you without any further notice.
If we are required to pursue legal action, you may be held responsible for legal expenses, court costs, and pre-judgment interest on your debt. These costs will significantly increase the amount of debt we are owed. In addition, court collection proceeds may negatively affect your credit rating.
We regret the necessity of this action. If you have made the required payment already, please disregard this notice.
If you have any questions about this debt, please contact our office immediately at {phone number}.
Sincerely,
{your signature}
{your name}
Sample Final Warning Letter Before Legal Action
This is a sample letter based on the basic format above.
January 28, 2022
John Smith
2004 South 51 Street
Mayfield, NC 28659
RE: Account Number 3900-42762
Dear Mr. Smith,
We have repeatedly requested payment of your delinquent account in the amount of $8200.00, and we have not received a response from you.
THIS IS YOUR FINAL WARNING.
This letter serves to advise you that if we do not receive payment in full within ten (10) days of the date of this letter, we will immediately turn your account over to our attorneys, who will begin legal proceedings against you without any further notice.
If we are required to pursue legal action, you may be held responsible for legal expenses, court costs, and pre-judgement interest on your debt. These costs will significantly increase the amount of the debt we are owed. In addition, court collection proceeds may negatively affect your credit rating.
We regret the necessity of this action. If you have made the required payment already, please disregard this notice. If you have any questions about this debt, please contact our office immediately at (265) 283-9958.
Sincerely,
Jackson Howard
Jackson Howard
Final Warning Letter Before Legal Action (Word Template)
- Use a basic, consistent format for collection letters and for final warning letters
- Clearly state this is the final demand for payment
- Provide a deadline for payment
- State the consequences of not paying by the deadline
- Send the letter via certified mail
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