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Writing Your Final Demand Letter

  • Debt Recovery Tips

What do you do when all other debt collection attempts fail? You have a choice: either let it and your money go or take the matter to the courts. In the case of the latter, in order to file your suit, a written final demand letter is highly recommended by most small claims courts and is in fact required by some

Always keep in mind that placing your debt collections in the hands of the court is the last thing you really ever want to do. You want to collect the monies you are owed, not jump through more hoops and invest more of your precious time leaving the decision in the hands of individuals not familiar with all of the facts. This is where the Final Demand Letter comes in. It conveys the need to pay while simultaneously fulfilling your legal requirements. A properly worded final demand letter results in payment in as many as one-third of all cases. We͛ve found that the written word is far more powerful at this stage of the game than verbal communication.

Think about the times you were embroiled in a heated debt collection situation. After exchanging angry words, perhaps even the threat of legal action, what happened? If you͛re like most people, nothing, you didn͛t pursue the claim.

Things change when you write your final demand letter. In your letter, lay out the reasons why the other party owes you money. Be clear to state if payment is not received, you will be left with no other option than to take the matter to small claims court or hand the account over to a professional debt collection agency. With the written word in hand, instead of just another voice of yet another bill collector, you and your claim take on a sobering reality.

With a final demand letter in hand, the debtor must now face the reality that you have no intention of simply going away but will take the matter before the courts or place your account in the hands of a collection agency.

Things to include in your Final Demand Letter
When writing your final demand letter, keep the following points in mind, regardless of whether or not you intend on pursuing them in small claims court

The Opening – Be firm. Immediately grab the readers attention by getting straight to the point of your letter.

Heavy Language – Reference Fine print or legalese in your contract or work order. This will add a serious tone to letter, especially if the customer has signed their name on the same document.

Demand Payment – It is imperative that you express exactly what it is you want. Ask for a specific amount of money to be paid, or for some other specific action to be taken, by a set date.

Consequence – State your intention near the end of the letter and give your customer an opportunity or a potential “out” of this situation (ex: Pay now and preserve your credit rating.).

Closing – Be Polite and professional. Though your attitude is firm and to the point, refrain from any personal attacks or antagonistic language in your final demand letter. You want the recipient to thinking upon receipt of your letter: How much of my time will this take? What are the consequences if I lose? How much more will my additional expenses be? You will often find the other party will be open to making a compromise or settlement.

Be sure to enclose a copy of your invoice or work order and be sure to review the history of the entire dispute. A judge or hearing officer will want to review your letter to familiarize themselves with the facts of the case.

Be sure to send your final demand letter by certified mail. This not only provides you with receipt confirmation if conveys the message to the recipient that you mean business.

(Though not used as much anymore, some business still handle everything via fax. If faxing the letter, be sure to print a confirmation report from your fax machine and attach it to your copy of the letter for proof.)

Note: If your debtor is a corporation, mail your final demand letter to the Statutory Agent, copying the debtor. You can call or visit their Sectary of State͛s website to obtain that information. If the debtor is not a corporation, be sure to mail your letter to the owner or partner; avoid sending it to a manager or clerk. You can pull the credit application you have on file to find the names of the owners, partners or corporate officers. You want maximum impact and who you send your final demand letter to can make all the difference.

Do you have questions regarding your final demand letter? contact The Stevens-Lloyd Group, Inc today. We͛ll gladly walk you through the process.

If you are a business owner trying to collect on past-due accounts, you may find the process quite frustruating. Turning accounts over to a collections agency may seem like a desperate step. But debt collection is a team effort, with you and the collection agency working together to accomplish the same goal: recovering your money. Contact The Stevens-Lloyd Group today so we can start working together right away.