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DEBT RECOVERY

WHAT IS A DEBT RECOVERY LETTER?

A debt recovery letter serves as a ‘pre-legal’ method for recovery of bad debts and past-due payments. It is basically a written reminder sent by the Creditor, a DCA (Debt Collection Agency), or a Private Debt Recovery law firm.

Debt recovery takes place when a loan such as a credit card balance goes unpaid and the creditor hires a third party to focus on collecting the money.

It is quite important because it is related to one’s credit score. If a person gets contacted by a debt recovery agency, they have defaulted on a loan and have delinquencies, it may impact their credit score by getting reported to the credit bureaus.

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thoroughly discuss their requirements and clarify any doubts they may have after which a customized document is drafted, according to every client’s specific needs.

Let us draft a Debt Recovery Letter for you, personalized and customized according to your specific needs.

WHEN CAN IT BE USED? 

01

When a person wants to 

recover a debt that is owing

to their organization

02

When a person wants to follow up once the invoice has been shared

to their debtor and the payment terms have expired or the

payment remains outstanding

after 28 days have passed

03

When there is a need to

commence a formal debt

recovery communication

Components

  • Name of Debtor, Creditor

  • Debt amount

  • Due Date of the debt

  • Interest payable on the debt (if applicable)

  • Legal threat against the debtor if it remains unpaid

FAQ's

Q

What legal action can be taken to recover a debt in India?

A

To recover the debt, both Civil and Criminal action can be taken with the help of expert debt
recovery advocates. Civil proceedings include sending notice to the debtor and filing a complaint
to initiate civil proceedings under Negotiable Instrument Act, Civil Procedure Code, or Insolvency
and Bankruptcy Code. Criminal proceedings are to lodge an F.I.R in a police station of an
appropriate jurisdiction.

Q

When to send a legal notice for debt recovery?

A

A legal notice for debt recovery can be sent before filing a case for recovery of debt
amount either as a civil suit or under DRT (Debt Recovery Tribunal) or under IPC.

Q

What documents must be required to prove the debt to a person?

A

Any document evidencing grant of money, is enough to prove the debt such as any document, contract, message, telephonic conversation, mail or post, can serve as proper evidence in Court.
Bank account transactions, promissory notes, a contract or other payments so made serve as legal evidence of the lending of such money.

Q

Is there any limitation period to file a civil suit for debt recovery?

A

Yes, the limitation period to file a civil suit for debt recovery is 3 years from the date of
the last payment made or the acknowledgment of debt by the debtor.

Q

What are the Debts Recovery Tribunals?

A

The Debts Recovery Tribunals have been established by the Government of India
under an Act of Parliament (Act 51 of 1993) for expeditious adjudication and
recovery of debts due to banks and financial institutions.
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