Answering a demand letter is important if you have received one. If you have found yourself in a dispute with another party who owes you money, you will find it beneficial to write a clear, concise letter demanding payment. You can take this letter with you to court. While not always successful, there does seem to be something about the power of the written word that motivates others to take action.

A demand letter is an amateur's professional version of a legal complaint and is the first step in filing a small claim. A clear, concise letter may save you time and energy in regards to defending your case in legal proceedings. Most demand letters should include a detailed explanation of the dispute along with your reason for wanting to settle the matter in court. It should also specify the relief you seek and the value of the claim.

What Should the Demand Letter Include?

The demand letter does not have to be in a certain type of specific legal format, but it should be detailed and organized. The letter should encourage the recipient to assess the situation in a business-like manner. Send the demand letter using certified mail and request a return receipt. Make copies of the letter and keep all correspondence that you receive from the adversary.


Consider filing a complaint in small claim courts with the clerk after sending the demand letter if all efforts have failed to resolve the dispute. Remember, the demand letter will be presented in court to show that all efforts have been made on your behalf to resolve the issue out of court.

While both parties may be aware of the course of events leading up to the dispute, a court will not. The demand letter should be brief, polite, in chronological order, and very detailed to ensure accurate information is presented to both the recipient and to the court. Include any phone conversations or inappropriate conduct by the recipient that may be relevant to the case.

For debt settlements, present any receipts or invoices related to the debt and be sure to note the balance due and the original due date. If you are willing to settle the debt for a lesser amount, include the acceptable amount and the terms of payment. Be sure you state your next course of action if the dispute is not resolved.

The demand letter should not show a lack of respect or contain any threatening language. The court will frown on a letter that conveys anger or rage and the recipient will be less likely to respond in a positive manner.

What Is the Purpose of a Demand Letter?

The purpose of the demand letter is to give the recipient a chance to consider their legal options before involving the court. It lets the individual know you are serious about resolving the issue, and you are also prepared to move forward in legal proceedings if need be. The letter also demonstrates to both the recipient and the judge that you are reasonable and intend to resolve the matter with affability.

Examples of When to Send Demand Letter

  • Your employer owes you money
  • A tenant owes you money
  • A business owes you money for a returned item
  • A client owes you money for services provided

How to Handle a Negative Response to a Demand Letter

Demand letters are not always well received, so do not be surprised if you get a negative response or reply. It is important to not let your emotions get the best of you by retaliating. Proceed as planned and file a small claim in hopes of settling the matter in court.

If you feel you have been fired unjustly and you are sending a demand letter to request a settlement with your former employer, you should be prepared to accept the response that almost every company will use when receiving a demand letter from a former employee. Knowing that the employer will most likely try to justify his or her actions helps you to be better prepared.

The response letter will most likely contain a lot of verbiages, and the last few paragraphs are the most important. Skip the nonsense and read the last few paragraphs to see where the company stands in the negotiating process. If they are willing to play ball, then it is a good sign, but if they are not indicating any type of negotiation, you may need to talk with an attorney and push the matter a little harder.

If you need help with answering a demand letter, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.