How To Write A Formal Demand Letter For Payment And Money Owed To Clear Outstanding Debt?

A demand letter is also called a debt collection letter. A demand letter explains why an individual or a company owes you money and formally requests that they pay it to you. A demand letter is a key to getting your dispute off the ground and into the Small Claims Courthouse. Writing and sending the letter provides proof that you have notified the other person of this Outstanding Debt and have Requested Payment. The demand letter must contain the disputed amount for which you are suing. You have to submit this demand letter to the person with whom you have the dispute. You don't need legal drafting experience to compose a demand letter, it does need to be clear and well organized. You have to give a brief history of the dispute. Be polite, concise, and specific about what you want and what your next step will be if the problem is not resolved.

Adelphia, New Jersey Demand Letter

Preparing Your Demand Letter

Make sure you type your demand letter so that it is easy to read. You should include the following details in your demand letter:

  • Your name and address
  • Name and address of the debtor
  • A description of the facts of the case
  • The amount you are seeking to collect
  • A date by which you are requesting payment
  • A statement that, if you do not receive payment, you will pursue legal action

Demand a response within a reasonable time. Asking for more money creates room for negotiation, but be aware that it might also mean the debtor will simply refuse to pay anything. Keep several copies of the demand letter and send it certified mail, return receipt requested so you can have proof it was received by the debtor.

Demand Letter Importance

A demand letter is the best to resolve a dispute between parties. A demand letter is often a great option for accomplishing this goal, and they can be sent by both attorneys and non-attorneys alike. Demand letters are commonly utilized in many types of cases, from business disputes to personal injury cases. Demand Letters often encourage parties to settle the dispute before ending up in extended litigation. A demand letter can also become an important part of any later litigation because it includes a detailed outline of the facts leading up to the dispute and your efforts to Resolve The Dispute​. A demand letter saves time and money in a dispute. If the dispute ends up in court, remember that the same judge who will hear your case will read your demand letter.

Legal Demand Letter

A legal demand letter is the first formal step in collecting a debt. This is an opportunity to put your concerns in writing and gives the other party a chance to fix it before further action is taken. It clearly lays out the amount owed and the circumstances that led to it. Sending A Legal Demand Letter makes it clear that you are serious about collecting on the debt. It may also include a warning that you’ll consider legal action if the debt is not paid by a particular date. Most law firms charge a set fee to write a letter of demand on your behalf. This can be a relatively inexpensive and effective way of recovering your debt.

Demand Letter Sample

A demand letter is a Request For Money Owed that is commonly the last notice to the debtor. It is most commonly used when requesting money for a past due amount. An effective demand letter will require careful thought and consideration to ensure it is clear concise and accurate. Here are examples of demand letters for your help:

Demand Letter From Attorney Sample

An attorney demand letter is a useful way to get someone’s attention. It serves as a serious warning that legal action will occur unless there is a response from the other party.

Dunn & Associates

Attorneys at Law

155 W 70th St.

New York, NY 10023

 

November 19, 2017

Mr. Calvin Jones

Baxter Construction LTD.

201 Ann St.

Newburgh, NY 12550

 

Re: Final Demand Letter Prior to Legal Action

 

On behalf of our client Tottman Supplies Corp., we at Small Claim Filing Company are writing to inform you of an overdue payment owed to our client. According to the construction materials invoice agreed upon by you and our client, you owe $8,960 for materials plus delivery.

This payment is currently 60 days overdue which, consequently, will result in interest charges applied to the delivery charge. Tottman Supplies Corp. charges 1.5% interest per 30 days, which is a reasonable percentage for the inconvenience. Therefore, you will be charged an additional $268.80 for the 60 days currently overdue, bringing the total amount owing to $9,228.80.

This letter serves as the final warning for overdue payment. If payment is not made within 7 days, we will have no choice but to take immediate legal action. Please contact our firm at if there are any questions regarding this demand.

 Yours Truly,

Patrick J. Lloyd

Attorney | Dunn & Associates

             Sample Demand Letter For Payment

 

 

From

_________________

_________________

_________________

_________________

 

 

Date: _________________, 20____

 

AMOUNT DUE $________

 

THIS IS AN ATTEMPT TO COLLECT A DEBT

 

Dear _________________,

 

You currently have an outstanding balance with _________________ in the amount of $________.

 

The outstanding balance is in regard to: ___________________________________.

 

In order to resolve this matter, we have provided the following payment options: (check all that apply)

 

☐ - Full Amount: $________ due by _________________, 20____.

☐ - Discounted Amount: $________ if paid by _________________, 20____.

☐ - Installment Payments: (check all that apply)

☐ - $________ paid on a weekly basis.

☐ - $________ paid on a monthly basis.

 

If there is no response to this letter, all legal rights shall be explored, including, but not limited to, legal proceedings necessary to recover the debt without further notice, or this debt may be transferred to a collection’s agency in accordance with State and Federal laws.

 

This demand letter for payment serves as official notice to you and maybe tendered in court as evidence of your failure to pay. If legal action is to occur to resolve this matter, it may involve having you pay attorney’s fees and may impact your credit history.

 

We hope to resolve this matter as soon as possible.

 

 

Sincerely,

 

______________________

 

           Sample Demand Letter For Car Accident

From

_________________

_________________

_________________

_________________

 

 

Date _________________, 20____

 

 

Dear _________________,

 

This letter is recognized as official notice that payment is being demanded for the car accident that occurred on _________________, 20____. The total demand amount, after calculating direct payments along with the pain and suffering of the event, is  $______________.

 

A breakdown of the total amount is as follows:

 

INJURIES/TREATMENT: $______________

OUT-OF-POCKET EXPENSES: $______________

LOST WAGES/EARNINGS: $______________

PAIN AND SUFFERING: $______________

 

STATEMENT OF FACTS: CAR ACCIDENT

 

On _________________, 20____, at approximately ____:____ ☐ AM ☐ PM the following accident occurred as described: ____________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

 

INJURIES AND TREATMENT

 

Directly due to the car accident, I had to sustain the following medical treatment: ______

______________________________________________________________________

______________________________________________________________________

 

OUT-OF-POCKET EXPENSES

 

As a result of the car accident I was required to come up with the following out-of-pocket expenses: _____________________________________________________________

______________________________________________________________________

______________________________________________________________________

 

LOST WAGES/EARNINGS

 

After the car accident, I lost the following wages and earnings as described: _________

______________________________________________________________________

______________________________________________________________________

 

PAIN AND SUFFERING

 

In consequence to the described events, I suffered the following: __________________

______________________________________________________________________

______________________________________________________________________

 

After careful consideration of the issues involved in this claim, and a review of jury verdicts and insurance company settlements with similar fact patterns, I believe the total demand amount represents a fair and equitable settlement amount.

 

Sincerely,

 

_________________

 

                          Adelphia Settlement Demand Letter Sample

 

I. The Parties. I, _____________________, with a mailing address of _____________________, City of _____________________, State of _____________________, Hereinafter the “Releasor”, hereby voluntarily and knowingly sign this release with the express intention of eliminating _____________________, with a mailing address of _____________________, in the City of _____________________, State of _____________________, Hereinafter the “Releasee”, of their liabilities and obligations as described below.

 

II. Release. Releasor hereby releases Releasee from all liability for claims, known and unknown, arising from property damage sustained by Releasor in an accident that occurred on _____________________, 20____ at ____:____ ☐ AM ☐ PM involving a vehicle owned by Releasee or driven by Releasee or Releasee's agent. Releasor understands that, as to claims that are known to the parties when the release is signed, any statutory provisions that would otherwise apply to limit this general release are hereby waived. Releasor also understands that this release extends to claims arising out of this incident that is not known by Releasor at the time this release is signed.

 

III. Right to Claims. By signing this release, Releasor does not give up any claim that he or she may now or hereafter have against any person, firm, or corporation other than Releasee and those persons and entities specified in Section I.

 

IV. Non-Admission of Liability. Releasor understands that Releasee does not, by providing the value described in Section V, admit any liability or responsibility for the accident described in Section II or its consequences.

 

V. Payment. Releasor has received good and adequate value (consideration) for this release in the form of: $ _____________________ (US Dollars).

 

VI. Binding Arrangement. By signing this release, Releasor additionally intends to bind his or her spouse, heirs, legal representatives, assigns, and anyone else claiming under him or her. Releasor has not assigned any claim arising from the accident described in Section II to any other party. This release applies to Releasee's heirs, legal representatives, insurers, and successors, as well as to Releasee.

 

 

Releasor’s Signature ______________________ Print Name ___________________

 

Date _______________________

 

 

Releasee’s Signature ______________________ Print Name __________________

 

Date _______________________

 

                        Small Claims Court Letter Template

 [Your address]

[Supplier's address]

Dear

Reference: [a single sentence summing up your claim]

As it has not been possible to resolve this matter amicably, and it is apparent that court action may be necessary, I write in compliance with the Practice Direction on Pre-Action Conduct.

[Provide a summary of the facts of the dispute]

From you, I am claiming [state what you want from the party you are claiming from]

I have calculated this sum [state how you have calculated the amount being claimed]

Listed below are the documents on which I intend to rely on my claim against you:

[List the key documents that you will need to use to prove your claim]

In accordance with the Practice Direction on Pre-Action Conduct I would request that you provide me with copies of the following documents:

[List any documents you want from the party you are claiming from]

I can confirm that I would be agreeable to mediation and would consider any other system of Alternative Dispute Resolution (ADR) in order to avoid the need for this matter to be resolved by the courts. 

I would invite you to put forward any proposals in this regard. 

[Alternatively, you can set out details of any ADR scheme that you are prepared to use]

In closing, I would draw your attention to paragraphs 15 and 16 of the Practice Direction which gives the courts the power to impose sanctions on the parties if they fail to comply with the direction including failing to respond to this letter before claim. 

I look forward to hearing from you within the next 28 days.

Should I not receive a response to my letter within this time frame then I anticipate that court action will be commenced with no further reference to you.

Yours faithfully, 

             Final Demand Letter Template

 

 

From

_________________

_________________

_________________

_________________

 

Date: _________________, 20____

 

AMOUNT DUE $________.

 

THIS IS OUR FINAL ATTEMPT TO COLLECT A DEBT

 

Dear _________________,

 

You currently have an outstanding balance with _________________ in the amount of $________.

 

The outstanding balance is in regard to: ___________________________________.

 

In order to resolve this matter, we have provided the following payment options: (check all that apply)

 

☐ - Full Amount: $________ due by _________________, 20____.

☐ - Discounted Amount: $________ if paid by _________________, 20____.

☐ - Installment Payments: (check all that apply)

☐ - $________ paid on a weekly basis.

☐ - $________ paid on a monthly basis.

 

If there is no response to this letter, all legal rights shall be explored, including, but not limited to, legal proceedings necessary to recover the debt without further notice, or this debt may be transferred to a collection’s agency in accordance with State and Federal laws.

 

This demand letter for payment serves as official notice to you and maybe tendered in court as evidence of your failure to pay. If legal action is to occur to resolve this matter, it may involve having you pay attorney’s fees and may impact your credit history.

 

We hope to resolve this matter as soon as possible.

 

 

Sincerely,

 

______________________