A Demand Letter serves as a final reminder to resolve an issue before the sender takes legal action against the recipient.

Sending a Demand Letter shows how serious you are about addressing a problem, as it typically sets a hard deadline and warns of the sender’s intent to sue.

A Demand Letter is also known as a:

• Letter of demand (LOD)
• Debt collection letter
• Demand letter for payment

You can customize LawDepot’s Demand Letter template for a variety of purposes, including when:

• Payment is due: Collect a debt that’s owed to you (e.g., you’re a landlord and your tenant fails to pay rent).
• Action is required: Use this in various situations, such as when someone doesn’t hold up their end of an agreement (e.g., you paid for a service that wasn’t completed, or you entered a contract and the other party breached its terms).
• Making an insurance claim: Remind an insurance company of their obligations to pay you for costs and damages after an incident (e.g., after you suffer a personal injury).

If the issue goes to court, you can use the letter as part of your evidence to support a claim.

You can use LawDepot’s Demand Letter to write a thorough request for an outstanding debt, action, or claim. However, every situation is different, and you may prefer to get legal advice if you have a complicated issue.  

Complete our questionnaire to create your Demand Letter with the following steps:

1. Explain why you’re writing the letter

State your purpose for writing the letter, whether it be for collecting a debt, demanding action, or making an insurance claim.

2. Give details about the issue at hand

If you’re demanding payment for money owed, include:

• The outstanding amount
• When the payment date was
• A description of the debt (e.g., when the money was lent, the reason for the debt, and any relevant contracts)

If you’re demanding action, include specific details such as:

• A description of the required action
• When you want the task completed
• Any previous contract agreed upon by the parties

If you’re making an insurance claim, include:

• Details of the incident (e.g., when it happened, the insurance claim number, and a description of the event)
• A description of any mental or physical injuries, if applicable
• A description of any lost income, expenses, or damages

3. Attach evidence, if you’ve got it

Any relevant documentation helps enforce your demand.

For example, say you are demanding an overdue payment for a personal loan you provided someone through a Loan Agreement or Promissory Note. You can attach a copy of the signed agreement as evidence supporting your request for payment.

Similarly, if making a demand for action or an insurance claim, you can support your argument by attaching relevant contracts, documents, or photos.

4. State the terms of your settlement (optional)

If you’re making an insurance claim, the settlement is the amount of money you demand from the insurance company.

If you’re collecting a debt, accepting a settlement typically means agreeing to receive less than what a debtor initially borrowed.

Sometimes, this is the best option if you know the debtor is unlikely to repay the full amount. In this case, you’ll at least recover a portion of your money.

Alternatively, you could settle for installment payments. This term allows the debtor more time to repay you.

5. Provide party details

State the names and contact information of the parties in the Demand Letter (i.e., the sender and recipient). 

It’s best practice to send your letter on the same day it’s dated. You can ensure that your Demand Letter gets into the recipient's hands by:

• Delivering it in person
• Sending it by registered mail, which offers proof of delivery
• Hiring a lawyer to deliver it on your behalf

Though Demand Letters are generally informal, having proof of delivery is good practice to show a future court that the Demand Letter was received but ignored by the recipient. Using registered mail or having a third party (e.g., a lawyer) deliver your letter and obtain an Affidavit of service will provide this evidence.

Service requirements vary by state and by type of case. For example, there are specific service requirements for a Demand Letter to a motor vehicle dealer in Florida. And some states require you to send a Demand Letter before filing a legal claim. In other cases, this isn’t necessary. 

Remember that sending your Demand Letter by email or text may not satisfy the legal requirements for proof of delivery. You may be able to request a read receipt through your service provider. In this case, the recipient sends you a notification when they open your message.

However, recipients may need to consent to send a read receipt. As such, email or text messaging are unreliable methods for delivering a Demand Letter. 

Typically, a Demand Letter sets a deadline for the recipient to reply. If the deadline passes and the recipient ignores or refuses to agree to the terms in your Demand Letter, your next course of action is to file a lawsuit. 

If you need to go to court to resolve the issue, be sure to gather evidence to support your argument (including a copy of your Demand Letter). 

It’s important to note that each state, and some counties, have a limit for the amount an individual can sue for in small claims court. For example, in Texas, you can sue for claims up to $20,000. 

Some states even require that you represent yourself during the case. For larger sums and more complex cases, the claim may go to a higher level of court. In these circumstances, legal representation is recommended. 

Check your local legislation for limits and requirements in taking the next step in a legal claim.

The timeline for reaching a settlement varies greatly depending on the circumstance. 

For private matters, a Demand Letter can be the final push a person needs to repay their debt or complete a task by a specified deadline. People may accept settlement terms in a Demand Letter to avoid a costly and lengthy legal battle. Cases that end up in court can delay you from getting a settlement.

If you’re demanding a settlement from an insurance company, time can vary for them to conduct an investigation and pay out a claim. Check your state’s laws to see if they enforce settlement periods for your type of claim.