What Is a Demand Letter?

Demand letters are professionally written letters composed by lawyers or other legal professionals on behalf of their clients. Usually, they act as an official demand for some type of remittance or repayment. This can be in regards to financial or other issues. 

What You Should Do About a Demand Letter

There are some important things to know when it comes to handling a demand letter. Whether the demand letter is correct or incorrect in the claims being made against you, how you handle them can have a major impact on the eventual outcome of your case.

Don’t Ignore It

First things first, you do not handle a demand letter by simply ignoring it. Demand letters are usually official legal documents that not only should be saved in your files for future use in case you need evidence, but they also need to be responded to professionally and promptly.

Calmly Consider the Letter

After committing to not throwing the letter away or stashing it with other things you may never address, the next thing to do is calmly and objectively consider the claims being made in the demand letter. If the letter is accurate, the person who sent you the demand letter is correct in asking for restitution; you may want to consider trying to avoid court by getting in contact with the person as quickly as possible and making arrangements to pay them back. Sometimes, all you need to do to settle a demand letter is to communicate.

Figure Out If You Need a Lawyer

If the claims being asked of you are incorrect or somehow unreasonable, you should contact a lawyer. A lawyer can help you respond to demand letters and can also help you handle the situation if it eventually ends up in small claims court.

Respond Accordingly

You or your lawyer should respond to a legal demand letter with a letter of your own stating how you intend to move forward.

What You Should Do When Writing a Demand Letter

If you are on the other side of the fence and it is you and or your lawyer writing the letter, there are some things you’ll want to keep in mind. Namely, the fact that it is incredibly important that you do not treat your demand letter as if it were a place for you to insult and degrade the person who owes you money. This is especially important if you think there is a chance of the case going to court. Why? Because while reviewing your case, the presiding judge is likely to read your demand letters. If it, or they, was written in poor taste, it will reflect poorly on your position and could have a negative impact on the outcome of your case.

While you might be tempted to write your demand letter in anger or as a threat, it is essential to keep in mind that an effective demand letter is a dispassionate and objective description of your history with the person, the specifics of the situation, what you demand, and how (if your demands are not met) you intend to move forward. Save everything else for the courthouse.


Injury Demand Letters

Demand letters having to do with injuries are slightly different from standard legal demand letters. Personal-injury legal demand letters typically include the following.

  • A concise description of the event in question.
  • An outline of who is responsible and liable for the accident.
  • An accurate and detailed description of the injuries resulting from the accidents as well as the corresponding bills and any other expenses that were incurred. This section is almost always written with the help of a lawyer and or accountant and can include money losses like loss of wages.
  • The amount of restitution being is demanding.
  • And, as always, what the next steps will be.

Now that you know what a demand letter is, you can decide if you and your lawyer need to send one or, if you received a legal demand letter, how you should move forward.


Alex is a small business blogger with a focus on entrepreneurship and growth. With over 5 years of experience covering the startup and small business landscape, Alex has a reputation for being a knowledgeable, approachable and entrepreneurial-minded blogger. He has a keen understanding of the challenges and opportunities facing small business owners, and is able to provide actionable advice and strategies for success. Alex has interviewed successful entrepreneurs, and covered major small business events such as the Small Business Expo and the Inc. 500|5000 conference. He is also a successful entrepreneur himself, having started and grown several small businesses in different industries.