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What to do if you receive a debt recovery letter

A standard debt recovery letter is usually sent to a person who has an outstanding amount owed to a bank, loan company or any other place who deals with money. The initial letter makes the person aware their debt has been passed to the collection agency and details what they are expected to do in order to resolve the issue. The letter will include details such as the original lender, the date the loan was taken out and the full debt total. It is important you check these details are correct before you take any further action.

If the initial debt recovery letter is ignored, then another will be sent. This may include a deadline date for the person to get in touch with the agency, it may also include details of any charges incurred for ignoring the first letter. Most reputable collection agencies will also list their charges on the back of the letter. These charges can be as much as £12 for every remainder letter they send and up to £50 for every time they have to send a collector out to your door. This means the amount you owe can increase quickly if you continue to ignore letters from the collection agency.

The first thing you need to do when you have established the details in the debt recovery letter are correct is seek debt advice from either the Citizens Advice Bureau or The National Debt Helpline. Both of these offer free advice and will advise you of the most sensible move. This usually involves writing a letter of reply to the debt collection agency with an offer to arrange a reasonable repayment plan. Most companies will agree to this and as long as the payments are made in a timely fashion and the debt is finally cleared, no further action will be taken.

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