What is a demand letter and do I need one?
When we’re owed money, nearly all of us ask the other party to pay us back. Obviously! We either ask orally (i.e. in person or via phone) or in writing (i.e. a letter, an email, a text, etc…). A “demand letter” is a tactic someone hires a lawyer to draft a document requesting that the other side pay. People use this strategy because they believe that if their opponent hears from a lawyer, their opponent will be worried enough to pay voluntarily.
Research from the Squabble Legal Team tells us three things about formal demand letters:
(1) Unfortunately, demand letters usually serve to enrich lawyers while achieving no result for the party who is owed money.
(2) In the rare situations where a demand letter does work, it is almost always in complex civil cases — not in small claims court.
(3) There is no legal requirement that a formal demand letter be sent.*
This explains why lawyers will decline to write a demand letter in small claims cases. Please be careful: there are some companies that may offer the services of a “professional” to write a “demand letter”. This is nearly always a waste of your time and money.
*It is true that many judges will ask that you show a writing in which you asked the defendant to pay you what you were owed. So as long as you make sure you’ve done so and that you bring this evidence to court with you, you’re good to go. This can be any form of writing — an email, a text message, a letter, a post-it note. If you’ve already done this, you’re ready to file!