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Demand letters are commonly used by businesses to send warning letters to people who owe them money. It allows the recipient to pay the money back and avoid a lawsuit. In brief, these letters demand a specific amount of money within a specific deadline and state what happens if the receiver does not comply with it. 

The concept of a demand letter may seem simple, but there are things you should know to increase your chances of success. Knowing these facts will help you resolve disputes and protect your interests. If someone is not paying back your money, consult a debt collection lawyer today to understand your options. 

Things to know about demand letters

  1. A demand letter shows that you are serious. 

Suppose that your business is engaged in a dispute with another company. They owe you money, and you have already made a lot of calls and texts. However, they are not responding to you and taking you seriously as they think you won’t take legal action. This is where you need to prove them wrong. When you send a demand letter, you show the other party a real possibility of a lawsuit. Therefore, this letter shows that you are serious about your payments. 

  1. A demand letter is generally seen as a good sign by the court. 

When you send a demand letter, you show the other party and the court that you are serious about resolving the issue and do not want to waste judicial sources. Courts like it when people make efforts from their side to settle disputes. After sending the demand letter, you will officially have proof of making an actual effort. 

  1. Demand letters can be used against you. 

If you take your case to court, the demand letter may be presented in front of the judge. If you use any insults, threats, or make unreasonable demands, then it might hurt your case. There are certain things a debt collector can and cannot do, and you must comply with them. 

If you make an offer for a reduced payment, the judge will ask you to stick with it. Therefore, ensure you give the recipient a time limit to accept the offer. You can also say that the offer will no longer be available if the case goes to court. 

  1. A demand letter can save you money and time in the long run. 

Although it will cost you money to hire an attorney to draft a letter for you, it will save you both time and money if the letter prevents you from going to court. Needless to say, litigation is more complex and time taking. Even if you win, you will still need to pay the fees.