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If a person or company owes you money and they are not paying in the agreed time frame, then this can be referred to as an outstanding accounts payable owed to you or your company. The person who owes you money is called a “Debtor”, while you are called a “Creditor”. If the Debtor is not responding to your calls and requests for payment, the next step is to send a demand letter.
A demand letter is a letter to the Debtor informing them that they have an overdue unpaid amount that is owed to you and you are formally requesting payment. In other words, the goal is to resolve the dispute before going to court and encourage the Debtor to pay you. Sending a letter may be helpful to get the Debtor to understand that you are serious about your desire to obtain payment from them to resolve or payoff the outstanding amount owed. Sending a letter also can be beneficial, as this may be the catalyst to get the Debtor to contact you to try and settle the amount owed. The settlement may be a lump sum payment of the total amount owed, a lump sum payment of an amount that is agreed upon by both parties to settle the debt owed, or an offer of paying the amount owed by way of a monthly payment plan, all of which is approved at your discretion.
No, you do not have to send a demand letter. However, a more formal way of collecting is to send a demand letter, which is helpful to let the Debtor know that you are determined to collect the overdue unpaid amount owed from the Debtor. Think about it. Would anyone really want to be sued over an amount owed? Yes, there may be a small percentage that don’t care or are willing to take the risk, but most people do not want to be sued nor go to court to try and settle an amount owed. In the Debtor’s mind, the costs of hiring an attorney to represent them versus paying the outstanding amount owed are one of those decisions that the Debtor needs to weigh out very carefully. Most people would like to avoid hiring an attorney and going to court.
A demand letter does not always need to come from an attorney. You can write your own demand letter in which you demand payment of the amount owed from the Debtor. However, a demand letter than is sent by an attorney can heighten the Debtor’s awareness that you are solemn and standing firm about collecting the amount owed. In other words, sending a demand letter signed by a lawyer may also make it more likely that the Debtor takes your request for payment seriously.
When a lawyer writes a demand letter, the letter can either include instructions to the Debtor that they must contact you, as the Creditor, or they can contact the attorney directly. If the letter includes notice to the Debtor that they must contact you, as the Creditor and the person to whom they owe money, then the Debtor will be given an opportunity to understand that while the attorney has written the letter and you are resolute about collecting the amount owed, they can contact you directly for resolving and hopefully paying the amount owed, either in a lump sum, settled amount or by a monthly payment plan. Knowing that they can contact you directly to resolve the issue may reduce the Debtor’s fear of speaking with a lawyer about their case. Keep in mind that if you would like the Debtor to contact the attorney to negotiate the amount owed, an attorney will charge extra for this added service of handling the collection of the amount owed as well as potentially negotiating the outstanding debt. If you choose to have the Debtor contact you, then what you should only pay is the price of the attorney demand letter.
An attorney demand letter is very powerful because it signals serious intent and legal backing, making the recipient take the matter more seriously. The letter clearly outlines the claims and potential consequences of non-compliance, leveraging legal expertise to encourage resolution without court intervention. This combination of legal credibility and formal communication often prompts quicker and more favorable responses.
Yes. The goal of sending out an attorney demand letter is to capture the attention of the debtor who owes you money so hopefully they will pay the outstanding amount owed or offer to make payments.
The demand letter can be mailed one of three different ways: regular mail, certified mail and certified mail with a return receipt. Here’s the difference:
Regular Mail – The letter is sent regular mail. This means that there is no tracking option to see if the letter reached the intended recipient.
Certified Mail – The letter is sent certified mail. This means that the envelope containing the letter includes a tracking number on the outside. The U.S. Postal Service tracks that number and the history of where the letter has been through the mailing process as well as the end result regarding where the letter was delivered can be displayed by going to the U.S. Postal Service website and inputting the tracking number. The benefits of this option is that since the Debtor or recipient does not need to sign anything acknowledging receipt of the envelope, it is more likely that the Debtor will receive it along with all of their other mail.
Certified Mail with Returned Receipt Requested – The letter is sent certified mail with a green card attached to the back of the envelope. This means that the envelope containing the letter includes a tracking number on the outside. The U.S. Postal Service tracks that number and the history of where the letter has been through the mailing process as well as the end result regarding where the letter was delivered can be displayed by going to the U.S. Postal Service website and inputting the tracking number. However, before delivery to the Debtor or recipient, the post office employee must ask for a signature on the green card by someone at the address listed on the envelope. If the address is a post office box or the recipient is not available at the time of delivery, the post office employee will leave a note at the recipient’s address or mail box that there is a certified letter that needs to be delivered. Knowing that a certified letter may mean a collection attempt, the Debtor may choose not to either pick up the letter or sign anything allowing the post office employee to deliver the letter. As a result, your letter may be returned without the intended recipient ever knowing what was in the envelope.
We recommend that the letter is sent regular mail or certified mail with no signature required. The cost is $0.64 for regular mail or $5.04 for certified mail with no signature needed. These costs are subject to change by the U.S. Postal Service.
The process is easy, the first step is to complete the Attorney Demand Letter Request form and pay the flat rate of $99. The cost is being paid to Texas Turnover Receivers LLC. Once we receive your completed form and payment we will email you a draft of your demand letter. Upon your approval of the draft, the demand letter will be mailed to the recipient via the mailing method selected on your form. For your records, a copy of the demand letter will be emailed to you.
Your contact information
Debtor contact information
Who you want the letter to be sent to
Contact information of the person you want the debtor to contact about the letter
Principal amount owed
Description about your claim
Mailing method
Payment information
If the person who owes the debt ignores your letter or the attorney demand letter, your next step would be to file a lawsuit. For more information about filing suit, contact our office at 817-965-3228.
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