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May 16, 2022 · Here are the top six reasons ignoring demand letters is not good business. Six Reasons You Should Never Ignore a Demand Letter. 1. The fact that you ignored the demand letter will be used against you in court. The demand letter will likely end up as an exhibit to the court and jury in any subsequent litigation, and your response to the demand ...
- Demand Letter Information
- Conclusion
- Video Transcript
1. A demand letter shows the other party you’re serious.
Let’s say your business is engaged in a dispute with another company. You’ve made phone calls and sent e-mails. Angry words are exchanged. The other company may think you’re not going to pursue the issue legally. A demand letter makes the possibility of a lawsuit “real” for the other company. Perhaps for the first time, the other party will have to weigh the possible consequences of not complying with the demand.
2. A demand letter is generally seen by the court as a sign of good faith.
The letter shows that the party sending it wants to resolve the issue and isn’t wasting valuable judicial resources. Courts like to see that efforts have been made to settle disputes. Sending a demand letter by certified mail (with return receipt requested) and by regular mail provides proof that you made the effort. In some cases, sending a demand letter is required before going to court.
3. The information in a demand letter may be used against you.
If you do wind up in court, a judge will read the demand letter. Being insulting or threatening can hurt your case. So can demanding an unreasonable amount of money. The wording of a demand letter is important. Certain issues fall under the Fair Debt Collections Practices Act, or other federal and state laws. You want to ensure any demands made are in compliance with all applicable laws. You also want to ensure the wording of the letter does not result in a waiver of your rights.
As you can see, demand letters can be an efficient option for settling disputes. They can expedite a successful outcome and avoid costly litigation. Even if you do end up filing a lawsuit, a demand letter shows the court that you reasonably tried to work with the other party to settle the problem.
What is a demand letter? And what should you know if you receive a demand letter or you’re thinking about sending one? These are the questions I’ll be addressing today. I’m Aaron Hall, an attorney representing business owners in Minneapolis, Minnesota. You can learn more about me at aaronhall.com. And please see the description below for a importan...
Receiving a demand letter does not make you guilty of anything, nor does it oblige you to take any action. This "lawyer's letter" is simply a document written for a creditor in order to make you take action. This does not mean that the demand letter has no legal value. It is used to calculate interest and to share legal costs if the case goes ...
May 23, 2024 · Ignoring a demand letter can make people think your business doesn’t play fair or handle issues well, which can scare away customers or partners. 5. You can hurt your credit score. Ignoring a demand letter about a financial obligation can have long-term effects on your credit score.
A demand letter is a way to: engage the debtor so you know they can be found and they’ve been successfully identified. see if the debt is acknowledged. see if you can work out a deal that is cheaper than going to court. There is no consequence per se to ignoring a demand letter.
Ignoring a civil demand letter from an attorney is a mistake. Certainly, civil demand letters are a standard part of doing business in today’s economy. To clarify, a civil demand letter from an attorney is basically a demand that you cease some behavior or business activity because it violates their rights or a claim for payment.
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Feb 13, 2013 · My colleagues here are right - the common tactic is to ignore the demand letter and make you prove your allegations and there is a chance that you won't win at trial. The other possibility is that that an insurance company is involved and your demand was either higher then what they think the case is worth or they don't think you have a valid claim.
