Often, we as individuals or firms lend money to another party. Or perhaps someone has purchased something from you on credit. Whatever the situation, there must be an agreed-upon date of repayment. Whether you are an individual or a company, that has lent money to another individual or firm, it is important to keep track of repayments and/or installments.
It is usually good foresight to send reminders to creditors before payment is due. Good creditors are a blessing as they pay on time without any hassle. However, every now and then, you may come across individuals and businesses that may delay repayments.
Responsible creditors may formally ask for more time to repay the outstanding payment. However, other less responsible creditors may simply ignore the reminders. If and when the creditors ignore multiple reminders for outstanding payments, the lender may issue a warning letter to the creditor.
A warning letter for outstanding payment is sent by the lender as a warning that if the creditor does not pay the outstanding amount, the lender may be forced to take legal action against the creditor. The warning letter for outstanding payment must include the amount outstanding, the relevant payment date, and intimation about the next steps that might be taken by the lender.
Warning letters are sent as a last resort to avoid a dispute and resolve matters amicably. The lender may send more than one warning letter. In case of multiple warnings, the lender may use a stronger tone of words with each warning letter. The first warning may be soft with a request for repayment. The second and third warning letters may use increasingly strong words. If all else fails, the creditor may seek legal guidance.
If you are trying to write a warning letter to a creditor and are confused about your wording, have a look at our samples of a warning letter for outstanding payment.
1) First warning letter for outstanding payment
Subject: Warning letter for outstanding payment
This is to remind you that as per our agreed-upon terms, you were required to make a payment of [enter amount] by [enter date]. Despite sending a reminder just before the payment date, I have still not received the outstanding payment.
On [enter date] we mutually signed an agreement whereby, I lent you a sum of [enter amount]. As per our agreement, you were to make quarterly payments of the amount [enter amount]. It seems there is a lapse from your side in keeping the terms of the agreement.
Please make the outstanding payment by [enter date], to avoid any late payment penalties. Your cooperation is highly appreciated.
File MS Word 2007/+
Size 21 KB
2) Strong warning letter for outstanding payment
Subject: Final warning letter for outstanding payment
This is to intimate you that after sending several warning letters, we have still not received any response from you. The payment on your borrowed sum is still outstanding in the amount of [enter amount].
We tried calling you multiple times; however, you were unavailable. This lack of communication and repayment of the outstanding amount has forced us to seek legal counsel.
Please consider this a final warning letter, after which we shall be taking this matter to court. In order to avoid a lawsuit kindly make the outstanding payment within five days of receiving this notice.
File MS Word 2007/+
Size 21 KB
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