While filing a lawsuit may feel like a drastic measure, in some cases merely threatening a lawsuit is enough to convince a business or individual that a matter must be taken seriously. Typically, an individual considering legal action will first send a formal demand letter, hoping that the recipient of the letter will decide to resolve the situation amicably and without involving the courts. If the demand letter does not produce results, a lawsuit can then be contemplated.
The purpose of a demand letter is to formally demand payment, and to let the recipient know the seriousness of the matter and that failure to make payment will result in legal action or collections. A demand letter describes why payment is owed and makes clear that ignoring the issue is not advisable. A successful demand letter is able to convince the other party that the easiest and cheapest resolution would be to pay its debt, or at least enter into negotiations.
After a demand letter has been sent and does not result in a satisfactory response, an individual may file a lawsuit with the court in the hopes that the court will award a judgment against the other party. In most states, a lawsuit begins with a complaint describing the issue, to which the other party must respond. While someone filing a lawsuit for a significant sum would typically hire an attorney, smaller claims often -- and sometimes by law -- are handled without attorneys in small claims court.
Demand Letter vs. Lawsuit
Unless a situation has reached the point where any type of written communication would be a waste of time, it usually makes sense to send a demand letter before filing a lawsuit. When using an attorney, it is far cheaper to send a demand letter than it is to file a legal complaint and proceed with a lawsuit. Even if an attorney is not involved, far less time and effort are required to send a demand letter than to file a lawsuit.
When to Hire a Lawyer
While hiring an attorney will add significantly to the cost of writing a demand letter or filing a lawsuit, there are also significant advantages to having a lawyer involved. Lawyers have experience writing demand letters, and will know how to target a letter to maximize the chances of getting a satisfactory response. A demand letter from an attorney is also more likely to be taken seriously by the recipient. While lawyers aren't generally allowed in small claims court, filing a standard lawsuit without an attorney is very difficult, especially for someone without legal experience.
About Demand Letters
In civil cases, a lawsuit is generally preceded by a demand letter. Writing the letter is usually the first step an attorney...
How to Write a Settlement Demand Letter
Before suing in small claims court, it is wise to send the party a letter demanding payment or a resolution. A settlement...
How to Write a Notice of Intent to Sue Letter
Write an intent-to-sue letter only if you plan to follow through with a lawsuit.
How to Write a Demand Letter
A demand letter is a formal letter making a legal claim, and requesting that the claim be satisfied, either by asking the...
How to Type a Letter of Demand for Payment
... customers are expected to pay when the goods are purchased or the ... A collection letter should be used when a...
How to Respond to a Default Notice Letter
A default letter notice, also called a letter of demand, is a notice sent to you from a company, a lawyer or...
Consequences of a Civil Demand Letter
A Civil Demand Letter is ... If you're unsure whether or not to ignore a Civil Demand Letter, seek legal ... About...
How to Write a Demand Letter for Payment
Use a sample demand letter for payment if ... Close your demand by politely stating you will file a lawsuit if ......
How to Write a Demand Letter for Small Claims Court
Be precise about details and give exact money ... it is wise to send the party a letter demanding payment or a...