What Is a Demand Letter?

A Demand Letter, also known as a letter of demand (LOD) or collection letter, is written to:

• Notify the recipient of their obligation to repay a debt or fulfill a contract
• Request payment or action from the recipient by a certain date
• Advise the recipient of potential legal consequences for failing to respond

When Do I Use a Demand Letter?

You can use a Demand Letter to maintain goodwill and to prevent the need for further legal action.

Situations that may call for a Demand Letter include:

• Debt owed: a creditor seeking to collect a debt that's past due
  from a debtor
• Action required: an individual requesting an action from an individual or company
• Insurance claim: an accident victim trying to settle a claim with
  an insurance company

What Information Is Required in a Demand Letter?

Information needed in a Demand Letter includes:

• Sender and recipient information
• Why you're sending the letter: debt owed, action
  required, or insurance claim
• Specific details, such as the reason for the loan or
  a description of the accident
• Amount or action being requested
• Deadline for the recipient to respond

How Should I Deliver My Letter of Demand?

The appropriate ways to deliver an LOD are:

• In person
• By proxy, e.g. a lawyer, friend, or family member
• By certified mail

What Should I Expect After I Send My Letter?

You can expect one of several responses to your letter of demand.

The recipient may:

• Accept your demands and pay the debt or complete the action
• Make a counter-offer, in which case you can accept the offer or negotiate further
• Ignore your letter, in which case you should discuss your options with a lawyer or take legal action