When normal requests for payment of services/products, such as invoices and telephone calls, don't generate payment by a customer/client, the next critical step to collecting funds is a demand letter. These letters are generally effective, however if not, the letter is the critical first step in the legal collection process. Learn how to craft a demand letter.
When normal requests for payment of services/products, such as invoices and telephone calls, don't generate payment by a customer/client, the next critical step to collecting funds is a demand letter. These letters are generally effective, however if not, the letter is the critical first step in the legal collection process. Learn how to craft a demand letter.
In a recent LegalZoom.com article, Trouble Getting Customers to Pay?, Heleigh Bostwick explained a demand letter (usually written by an attorney) is the first step in the legal process of collecting money owed to you. The letter is especially important if you think you may need to take the client to small claims court.
Demand letters are concise and to the point. They clearly state the:
Another article, The Do's and Don'ts of Writing a Demand Letter, explains demand letters should not:
The goal of the letter is to solve the problem, not create a bigger one. And, should the case go to small claims court, the judge who hears the case will read the letter. Acting as an antagonist is not beneficial.
Make several copies for your records and send the demand letter to both yourself and the client via certified mail, return receipt requested.
Fix It Garage
Address
City, State, Zip
Date
Dear Mr. Fix It Garage Owner,
On February 15, 2010, I took my car to your garage for servicing. The day after picking it up, the engine caught fire because of your failure to properly tighten the fuel line to the fuel injector. Fortunately, I was able to douse the fire without injury to myself.
As a direct result of the fire, I paid the ABC Garage $681 for necessary repair work. I enclose a copy of their invoice.
In addition, as a direct result of the fire, I was without the use of my car for three days and had to rent a car to get to work. I enclose a copy of an invoice for the rental cost of $145.
In a recent phone conversation, you claimed that the fire wasn't the result of your negligence and would have happened anyway. You also claimed that, even if it was your fault, I should have brought my car back to your garage so you could have fixed it at a lower cost.
As to the first issue, Peter Klein of the ABC Garage is prepared to testify in court that the fire occurred because the fuel line was not properly connected to the fuel injector.
Second, I had no obligation to return the car to you for further repair. I had the damage you caused repaired at a commercially reasonable price and am prepared to prove this with several higher estimates by other garages.
Please send me a check or money order for $826 on or before July 15. If I don't receive payment by that date, I'll promptly file this case in small claims court.
You may reach me during the day at 555-5555 or in the evenings until 9 p.m. at 555-6666.
Sincerely
LegalZoom.com offers a basic demand letter service, for $104, that includes:
The company also offers a self-service small claims package, in a limited number of states. The package includes the demand letter and other documents, information. The fee of $69 covers: