Monit – what is it?
The need to send a reminder arises when a counterparty is running out of time to pay for goods or services, or when he defaults on the repayment of a loan or loan installment, and in some cases (though far less often!) only when the deadline has already been exceeded. Sending a reminder to the debtor is a way to settle the matter amicably and is one of the methods of soft debt collection. Sending a reminder before the due date is additionally intended to prevent the transfer of the benefit into the wrong hands. How does it work?
When a counterparty purchases goods or services, as well as when it takes out a loan, credit or incurs another obligation, it is informed of the date of payment. According to the provisions, he should transfer the funds to the seller’s or creditor’s account before the deadline.
If the date indicated on the invoice or contract has already passed, and the money has still not been transferred, the creditor can start the collection process. At first, he may want to try soft debt collection – a set of actions aimed at recovering funds from the debtor. Soft debt collection is characterized primarily by low costs – most methods the creditor can try on his own with almost no additional fees.
One of the first steps in the process of recovering funds from unpaid invoices is just sending a reminder, or demand for payment. It reminds the unreliable counterparty to repay the obligation, but without taking legal action.
Important!
Creditors are not obliged to remind debtors that the due date has passed. Information about the deadline appears on the invoice, loan or credit agreement, and it is the buyer (borrower) who should see to the date of payment or repayment of funds. If the invoice has been sold (e.g., under factoring), then the recipient must remember to make a transfer to the account indicated in the assignment of receivables.
When should a reminder be expected?
Although there are no rules on when to send a reminder, practice shows that they are most often sent no earlier than 7 days before the due date. This gives the debtor a few days to pay by the indicated date and avoid further, often more serious, consequences.
What does the prompt look like?
Since a reminder is not a legally regulated document, it can take various forms. Among the most commonly used are:
- electronic notification (SMS, e-mail, instant messaging);
- telephone notification;
- written notification (sent by registered mail).
Important!
There is another type of notice, which is often confused with a reminder, and is in fact a separate document – we are talking about a pre-trial demand for payment We will return to it later.
How to write a reminder?
Although the reminder does not have a specific form, it is a good idea to draft it accurately, including all the most important information and a description of the situation – in the extreme case that for a long time the creditor is unable to recover his money and is forced to go to court, carefully prepared reminders can serve as evidence in the proceedings.
What kind of data should be included on the coinage?
So that the creditor can be sure that he has seen to everything, he should make sure that the contents of the reminder include:
- The date and place where the reminder was sent;
- Full name and address of the creditor (full name or company name, residential or business address);
- Exact details of the debtor (so that there is no doubt to whom the letter is addressed);
- The basis of the receivable (for example, invoice number, credit agreement);
- The amount owed (not including any interest);
- A clearly worded request to settle the debt;
- Bank account number to which the debtor should send the funds.
Monitored vs. subpoenaed
If sending a reminder, even several times, has no effect, it is necessary to plan further steps. What can a creditor waiting for a debt to be paid do?
Pre-trial demand for payment
A popular solution used next after sending a reminder is to make a pre-trial demand for payment. In addition to a set of data (the same as in the case of the above-mentioned letter reminder), it is worth describing in the payment summons further planned actions – for example, entering the dishonest counterparty in the National Debtor Register or taking the case to court.
Final call for payment
This document is nothing more than a reminder sent when there is no response to a pre-trial demand for payment. Its form should be similar, but it is worthwhile to include clear wording informing the debtor that the next steps will be more decisive.
How do I respond to the prompt I receive?
But what if we find ourselves on the other side of the dispute and it is to our address that the creditor serves the reminder? First of all, there is no need to worry – sending a reminder is an expression of goodwill and a desire to settle the matter amicably.
If you receive a reminder, it is best to make repayment right away. This seems obvious, but often debtors still wait, which leads to receiving further reminders, calls for payment (and therefore also to incur costs, since it is the debtor who is obliged to cover the cost of sending reminders).
What if we don’t have the funds to pay off the debt at the moment? The first step in such a situation should be to contact the creditor immediately. A sent reminder means that the person or company you owe is taking the situation seriously – so it’s not worth burying your head in the sand and hoping that the statute of limitations has run out on the matter. In many cases, prompt contact from the debtor and an explanation of the reasons for the delay makes it possible to jointly set a new date for repayment of the debt, allowing the funds to be collected and the dispute to be closed without going to court.
