Example Demand Letter: Second Attempt to Collect a Debt

What is a Demand Letter?

Example Demand Letter Template

[DATE]

[DEBTOR]
[STREET ADDRESS]
[CITY], [STATE] [ZIP]

Account: [DEBTOR’S ACCOUNT]
Invoice #: [INVOICE NUMBER]
Invoice Date: [INVOICE DATE]
Invoice Amount: $[INVOICE AMOUNT]

THIS IS A DEMAND FOR PAYMENT.

YOUR PAST DUE ACCOUNT HAS BEEN REFERRED FOR COLLECTION. IN AN ATTEMPT TO GIVE YOU AN OPPORTUNITY TO RESOLVE THIS DELINQUENCY, PLEASE SEND YOUR PAYMENT OR EXPLANATION FOR NON-PAYMENT.

SEND PAYMENT OR CONTACT THE CREDITOR DIRECTLY AT:

[CLIENT]
[STREET ADDRESS]
[CITY], [STATE] [ZIP]
[PHONE]

• PAYMENTS BY PERSONAL CHECK, MONEY ORDER, OR CASHIERS CHECK MAY BE ACCEPTED.
• BANK AND SERVICE CHARGES WILL BE ASSESSED ON ALL RETURNED CHECKS.
• TO INSURE PROPER CREDIT, PLEASE INCLUDE THE ACCOUNT NUMBER REFERENCED ABOVE.

THIS IS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. AS REQUIRED BY LAW, YOU ARE HEREBY NOTIFIED THAT A NEGATIVE CREDIT REPORT REFLECTING ON YOUR CREDIT RECORD MAY BE SUBMITTED TO A REPORTING AGENCY IF YOU FAIL TO FULFILL THE TERMS OF YOUR CREDIT OBLIGATIONS. UNLESS YOU NOTIFY [COLLECTOR] DIRECTLY WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE THAT YOU DISPUTE THE VALIDITY OF THIS DEBT OR ANY PORTION THEREOF, [COLLECTOR]WILL ASSUME THE DEBT IS VALID. IF YOU MAKE A REQUEST TO [COLLECTOR] DIRECTLY, IN WRITING WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE, [COLLECTOR] WILL OBTAIN VERIFICATION OF THE DEBT OR OBTAIN A COPY OF THE JUDGMENT AND MAIL IT TO YOU. IF YOU MAKE A REQUEST TO THE CREDITOR IN WRITING, WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE, THE CREDITOR WILL PROVIDE YOU WITH THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR IF DIFFERENT FROM THE CURRENT CREDITOR. FURTHERMORE, YOU UNDERSTAND THAT THIS NOTICE IS FROM A DEBT COLLECTION AGENCY OFFERING YOU AN OPPORTUNITY TO SETTLE THIS DELINQUENCY WITH THE CREDITOR.

If you have any questions, please feel free to contact our office.

Sincerely,

[ATTORNEY]
Attorney at Law
[PHONE]
[EMAIL]

Video Transcript

What is a demand letter, and what should you know if you receive a demand letter or you’re thinking about sending one? These are the questions I’ll be addressing today. I’m Aaron Hall, an attorney representing business owners in Minneapolis, Minnesota. You can learn more about me at aaronhall.com, and please see the description below for an important disclaimer.

All right, what is a demand letter? Quite simply, it’s a letter where a party is demanding something. Typically it’s written by an attorney, and typically the letter is demanding a person stop doing something that’s illegal, or start doing something that they’re required to do. For example, I might send a letter on behalf of my client when my, another party in a contract is breaching the contract, and the letter would say, on behalf of my client, we demand that you stop breaching the contract. Or, for example, a letter might say, we demand that you stop infringing my client’s intellectual property rights. Maybe it’s a copyright or a trademark issue. So those are a couple examples of a demand letter.

How long is a demand letter? Well, it could be anywhere from 1 to 4 pages, I suppose. Typically mine are between 1 and 3 pages. One page is going to be really simple, just saying, look, we demand that you stop doing something, and we’re asking them to contact us and try to work things out. It would be three or four pages if we articulate the specific legal reasons why they need to comply with the demand letter. And maybe it’s saying, if you don’t, here’s what we’re going to do, and we’re going to seek attorneys fees and court costs and breach of contract damages, whatever those details are that we want to communicate in a longer letter.

Here are five things to keep in mind with demand letters. A demand letter shows that the sender is serious. If a sender of a demand letter has hired an attorney, they’re clearly spending money to protect their rights, and it demonstrates that they’re more serious than if they’re just emailing or calling and making legal claims themselves.

Second, a demand letter is generally seen by the court as a sign of good faith. It demonstrates that the parties are trying to work things out instead of going straight to litigation by suing in court.

Third, keep in mind that the wording in a demand letter can be used against you. That’s often why it’s written by an attorney, because you want to be very careful about what is said in a demand letter. As the old saying goes, whatever you say can and will be used against you in a court of law.

Fourth, sending a demand letter may save you time and money in the long run. And that’s because if you can avoid litigation, which is expensive, stressful and distracting, a demand letter can help you try to work things out. Negotiation is, as a general rule, far less expensive, far quicker and far less stressful than going to court and trying your case before a judge. A lawsuit often takes months, if not years.

Fifth, don’t ignore a demand letter. If you ignore a demand letter, you’re basically saying to the other side, I’m not going to respond to you and try to work this out, and that often leaves them no choice but to sue you. So by responding timely to demand letter, or having your attorney respond to one, you’re able to try to work things out without expensive and stressful litigation.

I’ve written an article on my website at aaronhall.com. You can click the URL in the description below to see that. And if you have questions, check out my website, check out the links below, and you’re welcome to subscribe to this channel for other educational videos like this.

This video is subject to a disclaimer. Please see that disclaimer below, and thank you for joining me today. I’m Aaron Hall. Learn more at aaronhall.com.