Demand Letter – Definition

Cite this article as:"Demand Letter – Definition," in The Business Professor, updated September 14, 2019, last accessed October 19, 2020, https://thebusinessprofessor.com/lesson/demand-letter-definition/.

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Demand Letter Definition

A demand letter refers to an official business letter that a lawyer sends to a debtor or the borrower asking for payment. The letter is written in a professional manner complying with specific legal framework. Usually, the lawyer doesn’t send the demand letter to debtor until the payment becomes overdue. Earlier, the debtor receives a reminder via phone and many other ways in order to offer timely reminders to the borrower. There are many individuals who treat the demand letter as a legit grievance.

A Little More on What is a Demand Letter

Many demand letters prevailing in the United States comply with the Fair Debt Collection Practices Act (FDCPA), or fall under the provincial laws. These laws outline the policies and regulations that should be followed at the time of making collections from the debtor. If the given rules are not followed, the debtor has the right to claim damages from the concerned party. Hence, official counsel makes collection of highly overdue loans.

Demand letters are usually used in cases involving contract law, tort law, and commercial law. However, it is common for fake companies to ask for overdue payments immediately from customers through demand letters. In most of the cases, such letters don’t even follow the appropriate rules and format. Such schemes are misleading, and result in scams where the innocent customer sends unnecessary payments out of fear.

In the real world, demand letter doesn’t support a minimum or maximum length. Though the shorter the demand letter, the more convenient it is. An ideal demand letter should include the purpose of making the request. Any irrelevant material beyond it would make the letter ineffective. A demand letter that talks to the point will showcase the intensity of the legit matter. The occupied law clerk as well as judges prefer how brief the content is.

Demand letters in personal injury

In case of dealing with personal injury claims, the first step is to submit a demand letter to the insurance organizations. The intent is to demonstrate facts that made victim to approach the insurance companies in order to receive sufficient claim. A general demand letter includes the information about the accident, discussion of accident liability, overview of personal injuries, information of medical treatments, medical bills or lost financial reports, and injury settlement demand.

Reference for “Demand Letter”

https://www.investopedia.com/terms/d/demand-letter.asp

https://en.wikipedia.org/wiki/Demand_letter

www.businessdictionary.com/definition/demand-letter.html

www.duhaime.org › Legal Dictionary

https://thelawdictionary.org/demand-letter/

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