You’ve gotten an intimidating looking letter marked “Letter of Demand” in the mail. So, now what? Don’t toss it in the fire, don’t pretend it never arrived, and don’t bury it in the sand.
This blog post will tell you everything you need to know and exactly what you need to do next to save yourself time, hassle, and costly legal expenses.
What is a letter of demand?
A letter of demand is a device a business or person might use to ask you to pay them money. It might follow a series of unpaid invoices, or it might come if you haven’t made payments on a loan.
Basically, if you receive a letter of demand, it means someone is pursuing a debt they believe you owe them. And they’re getting serious about it. Since the next step after an unsuccessful demand letter is to start litigation in court.
The letter of demand gives you a chance to resolve the debt before it goes to court.
Do I need to respond to a Letter of Demand?
This depends on a few things. Just because a letter claims to be a letter of demand doesn’t make it a legal letter of demand.
Features of a letter of demand
A letter of demand must include:
- the date
- the demanding party’s full name and contact information.
It should also outline:
- That you owe the demanding party money
- How much money they claim you owe
- When the money should have been paid back, if the debt was due by a certain date
- The date they want you to pay them by
- How the money should be repaid
- That legal action may be started if the debt is not repaid by the time specified in the letter.
- That you may need to pay their costs, plus interest on the debt. This might include costs like the legal fees for the letter of demand.
If any of this information is not present, the letter of demand may not be enforceable. If that’s the case, you may not need to respond.
That being said, it might be a good idea to respond in any event. The next step for the party making the demand is to start court proceedings – which can be expensive for you.
So, it’s usually best to try to resolve these matters as early as possible.
How do you respond to a letter of demand?
If you get a letter of demand, you might consider these options for how to respond:
- You can pay the other party what they claim to be owed.
- You can send an offer to settle the claim.
- You can ask for more information.
- You can deny that you owe them what they claim to be owed.
- You can suggest going to mediation.
- You can do nothing.
Whatever you choose, it’s important that you keep copies of any information or files that are exchanged between you and the other party. You will need these if you need to build a case for yourself in court down the line.
Be aware that the response(s) you send can be used in court later on, unless it is marked as a ‘Without Prejudice’ offer.
How can I get out of a letter of demand?
You need to resolve the matter before it gets more serious. Communication will be key here.
If you’re unable to communicate with the demanding party in a calm, reasonable manner, you might need a lawyer to step in.
Altria Law will help you resolve your letter of demand
The experienced commercial lawyers at Altria Law will help you respond to and resolve your letter of demand before the matter goes to court.
We’ll outline your legal rights and your options, so you’re fully informed about what you can do – and what you can’t.
We’re here to put the law on your side.