What Is a Debit Note?

A debit note is sent when payment is overdue, as a reminder that the bill needs to be paid. A debit note is a step in the process of collecting on unpaid bills.

Written Reminder

A debit note is a written reminder that money is due. It can be in any format, such as a letter, a postcard or a copy of the original invoice stamped "2nd Notice" or "Past Due."

Don't Ignore It

Don't ignore a debit note when you receive one; that can add penalties and increase the amount you owe. If you believe you've received the note by mistake, contact the sender immediately to resolve the problem. If you do owe the money but aren't able to pay it, see if you can work out a payment plan.

When to Send One

Debit notes usually are sent after the initial bill, invoice or loan payment is overdue by a certain amount, commonly 10 or 30 days.

What Happens Next

If debt continues to go unpaid, usually the next step is to hire a collection agency.

Long-Term Effects

Failing to pay even a relatively small debt can lower your credit rating. That means you will have trouble getting a loan or other credit at a favorable rate--or at all.