How to Write a Good Demand Letter
If a client or customer owes you money, you should send them a letter explaining why you are entitled to payment, and demand that they pay you in full, within a time frame you deem reasonable. Your letter should be polite, but also firm and direct, in order to communicate that you are serious about collecting what you are owed.
The wording of the demand letters varies by situation, but all of them should have the following key elements:
This cannot be stressed enough. You might feel like your client is an asshole for stiffing you, but the last thing you want is to put them on the defensive with your tone. In your head, feel free to call them every expletive in the book – but your demand letter should be all business. Focus on your legal rights and what they stand to lose in terms of time and money if they force you to take the issue to court.
Recap What Happened
Yes, I know you both know what happened. But if you end up in court, the letter will be used as evidence and a detailed description of the events will be very helpful to the judge in understanding your position. You’re not summarizing the events for yourself or your client, you’re providing the judge with an easy-to-follow chronology of how you’ve been cheated. Bonus: it’ll also preempt any attempt on the offending client’s part to play stupid.
Include a Specific Demand
If you don’t ask for what you want, you’re not going to get it. If you want your client to pay up, state the exact amount owed, and how you arrived at that number. Also tell them when you want it – remember, they are already late, so while you should give them a reasonable time frame, you don’t have to bend over backwards to accommodate them at this point.
Keep it Professional
The more formal and official you sound, the greater the chance that the other party will take you seriously. Your best option is to have your demand letter drafted by a lawyer. If that’s just not going to happen, it’s possible to make it read like it was drafted by a lawyer (for instance, by using one of our templates).
If you’re not using a lawyer, always send demand letters on company letterhead, using certified mail. Your tone should be firm and all the information provided in the letter has to be correct. Giving the impression that you know exactly what you’re talking about and that you will take no shit from anyone can be incredibly effective in getting taken seriously and ultimately receiving that past-due payment.
Make Some Threats
As long as your demand is valid, there is nothing wrong or illegal in letting the other party know that hey have the option of paying you what you’re owed or litigating the issue in court. In fact, you’re doing them a big fat favor by allowing them to simply remit payment and otherwise get away with breaching a binding contract with you.
Do not feel bad about informing anyone that you know what your rights are, and that you are not hesitant to use any means necessary to enforce them.
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