Debt Recovery: The Final Demand Before Third Party Collectors
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Debt Recovery: Making Your Final Demand Before Sending Your Customers to Third Party Collectors


When deep inside your debt recovery process, you have exhausted all costs and feel it’s time to send your account to collections, stop right there. Never send your debt recovery out of house until you make one last ditch effort: your final demand. Final demands can be the PROBLEM SOLVER in debt recovery. Learn how and when to use them in your debt recovery.

Using Final Demands in Your Debt Recovery Process

What is a final demand?

To be an expert at debt recovery, you have to understand how your collections process differs along the way. You have your customers, who are people that respond to your requests and whom you work together to help find a solution to get the account resolved. Debtors, though, are customers who are refusing to acknowledge your communication and the issue at hand. Final demands are something you would NEVER send to a customer, solely to a debtor. They are essentially alerting the debtor if they do not address the issue NOW, that the account will then be terminated with you and sent elsewhere. Final demands should never come out of the blue, but should be the end of a multiple step collection process.

Why do I need a final demand?

The final demand isn’t just about getting their money, it’s about getting their attention. If the final demand works, and the customer calls, you are able to then speak to the customer and try to work out a payment schedule. You are able to reiterate that if that payment is not received within the terms of that schedule, the account will go to collections. You want to give the debtor as many opportunities to pay YOU as possible, so you don’t have to pay a collection agency. Final demands allow you to weigh one last time whether a customer can be salvaged, and is key to deciding if it’s time for collections.

Final Demand Mistakes

Final demands are essentially ineffective if you don’t know how to use them correctly. For example, if you threaten to send an account to collections within a certain amount of time, do so. Word will travel fast if you are all talk. It also establishes a mindset for the debtor that not paying has no consequence. Follow up with that customer on the last day of your final demand. It’s really about putting all the effort you can into an account before turning it over. As well, never send a final demand too far from the last contact with your customer. Debt recovery should be a tight cycle, one in which consistent contact with the customer keeps you at the top of their list. The longer you wait in between contacts the more likely it is you’ll be ignored.

Final Demand Execution

  • Send your final demand by courier or as a certified letter. It adds urgency and importance.
  • Always set a specific deadline within the letter that is no longer than 2 weeks.
  • Make sure the letter clearly states that the debtor has the set amount of time – until the account will be sent to collections and reported to the credit bureaus.
  • Make sure the letter includes clear instructions that the customer should call you with questions or concerns about any of the owed amount. Allow them to see you are willing to talk.
  • If you have not heard from the customer in the allotted amount of time, try faxing and calling their office one more time.
  • Send your account to collections.

Viewing the last step of a your debt recovery process as an entirely separate entity helps you execute it with the most impact. Understand the final demand is putting forth as much effort as possible to communicate with your customer that this is their last chance to reply without consequences. By treating this step as a conclusion to your role in the debt recovery, it makes a perfect transition for either your customer finally speaking up, or sending that account to the only place it has left to go: collections.

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