A Final Demand Letter is a final letter sent in an attempt to collect a debt or repayment. The letter is sent before a collector or financial institution filing legal action against a debtor. A final demand letter is sent by a creditor demanding payment, usually within 7 days before they take further action.
A Final Demand is not a statutory notification, but it is a general requirement of the Court before legal action can be taken. Any such letter must be taken seriously as you can expect notification of further recovery action typically within a week or so.
Understanding Payment Demand Letter Templates
Demand for payment letters should be used in any circumstance where someone owes you money. Remember, every situation is fact-specific and should be approached differently. For example, if you are a building contractor and have completed work as agreed, you shouldn’t send a demand for payment on the date the work is completed. At that point, a professional invoice template will do.
However, if you aren’t paid within the time stated in the agreement, a demand for payment becomes appropriate. Similarly, if you were charged for a service that wasn’t provided or a product that wasn’t delivered, you are entitled to a refund. There is no need to send a demand for payment when a simple phone call will suffice. Typically, when companies accidentally charge you, a phone call will rectify the situation.
If you have contacted the company and explained the situation, and they have indicated they will fix it, but haven’t done so in a reasonable amount of time, a demand for payment may be appropriate. Also, if a company refuses to credit your account and you believe it is appropriate that you be credited, a demand for payment may be in order.
Legal Consideration For Payment Demand Letter Before Legal Action
When writing your demand letter, keep your goal in mind. You’re encouraging your opponent to assess the situation in a business-like way. Ultimately, you’ll want the letter to raise the following types of questions in the mind of the defendant.
- How much time will a defense take?
- Do I want this dispute resolved in public?
- Will I lose?
- How much will it cost me if I lose?
- Can I settle this now for less money?
- Party information: both the person owed the debt, and the person owing the debt, should be identified.
- Date debt was incurred: the date the unpaid-for work was completed.
- Date debt was improperly charged: if the dispute surrounds a charge for services not rendered or other improper charges, the date of the charge.
- Details of debt: facts describing the nature of the debt, including:
- The nature of agreement.
- The amount agreed to.
- How the agreement was not followed.
- Details of prior attempts to collect the debt: information such as calls made, emails sent, invoices mailed.
- Signature: the author should personally sign the document.
- Consequences for non-payment: if the author intends to sue if the debt isn’t paid, this should be included in the demand for payment.
Remember t not to write those particular questions. Instead, write the letter in a way that makes your opponent think about these issues.
What Should Payment Demand Notice Include?
There is some essential information that should be included in a Payment Demand Notice. Such information is detailed below:
Be sure to send a demand for payment using a method that allows you to obtain proof of receipt. This can be return service requested, certified mail, or through a signature program offered by a private delivery service.
A demand payment letter puts an individual or company on notice that you’re considering legal action against them. Most people hire a lawyer to write their demand letters, but you can write it yourself.