What Makes a Good Letter of Demand?

31 Aug 2016
Letter

If you have been chasing a debtor trying to recover money that you are owed, but have so far been stonewalled in your attempts to get in touch via phone or email, your next step will likely be to write a formal letter of demand. A demand letter is an official notice that you send directly to the person with whom you have a complaint. This notice serves more or less as a final warning to your debtor and will usually include a deadline for them to settle the debt. If the debtor ignores your demand letter, things will then often escalate.

So what makes a good letter of demand, and which elements should you plan to include if you are preparing one? Here are a few tips worth following to create the most efficient and beneficial demand letter:

Give a history of your claim

The first few body paragraphs of almost any demand letter will include a history of the claim or dispute at hand. What is your complaint against the debtor? Why do they owe you or your business money? What products or services did you provide to them? Outline all of this information, as well as the actions you have taken so far to settle the debt (to no avail). This recap is less for your debtor and more for a judge. If your case goes to court, you will be able to enter your letter as evidence, and it will preserve your version of events for the record.

Include dates

Because your letter could end up as evidence in court proceedings, you need to make it as informative and factual as possible. Providing dates assists to accomplish this task. Not only should you date your letter, but you should also provide dates for the purchase or loan in question, the original payment due date, the dates of your attempts to settle the debt, and the final deadline you are imposing with your letter of demand.

Be polite

Resist the urge to be rude, aggressive, overly confrontational, or threatening. There are two reasons for this rule. First, there is the chance that your letter could prod your debtor into finally paying you—something that probably won't happen if your tone or words are too hostile. Secondly, there is also a chance that your letter will be read later by a judge, in which case a more cordial, polite tone will reflect better on you than an adversarial tone. Your goal is to get across the fact that you are serious about escalating this matter, so act suitably professional—even if your words are firm. You might even include the words "without prejudice" somewhere in the letter, to convey that you are not trying to threaten, insult, or slander the recipient.

Attach or reference supporting documents:

What documents do you have that support your story? Bills, receipts, invoices, and previous emails or communications inquiring about the status of the debt are all worth referencing and attaching to your letter. Again, your debtor probably already has these materials or is familiar with them, but attaching them now is your chance to get them together should you need to escalate the matter to a debt collection agency.

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