After I wrote the blog post “Stuff I Wish I’d Known Yesterday,” which was about writing demand letters, I received a few questions. A lot of the questions were the same, so before I find myself repeating “that is not what I meant at all. That is not it, at all” I thought a follow up post would be appropriate. (Free bookmarks to anyone who can identify the quote without using google.)
Let’s go back and think about when you may want to use a demand letter: you did something with someone else, something bad happened, and now you want the other party to do something to fix it. That’s it. If we were to go back to the example of the debt, then basically the situation is this: you loaned money, the other guy didn’t pay you back, and now you want him to pay you by a certain date.
Problem 1
You should not send a demand letter as a first step to getting your money back. Try to talk with the other party first and see if you can come up with an agreement. Sometimes it is true that you can catch more flies with honey than you can with vinegar. A demand letter isn’t a first resort; it’s something you use after you’ve tried being a nice and haven’t gotten anywhere.
Problem 2
Don’t include details that are not important. This is not a confessional; stick to the facts that are relevant, and leave out the stuff that isn’t. What usually matters is that you loaned $500, not that you gave all that money in $20 bills.
Problem 3
Don’t admit things in the letter. Confession may be good for the soul, but it’s not so good when included in a demand letter. Sometimes, a demand letter can be the first step in going to court. That means that you have to be careful what details you include in the letter. Basically, by writing a demand letter, you are telling the other side “look, this is what I want you to do by this date.” If the other party doesn’t think that they should have to do what you want, then it’s up to them to prove why they shouldn’t. Don’t help them by writing down everything single thing you’ve ever done wrong; let them do their own homework.
Problem 4
That being said, don’t lie. Don’t stretch the truth, don’t mix up details, don’t embellish. Stick to the truth and the relevant facts.
Problem 5
Keep the letter short and sweet. If your demand letter is five pages long, you need to edit. Unless you’re a multimillion dollar corporation, your situation should be able to be summed up in a page or less.
Problem 6
Before you send the letter, think about the consequences. If you are sending the letter to someone that you have an ongoing relationship with (for example, someone from your wife or husband’s family), you have to consider what is going to happen after you put the letter in the mail. Are the consequences worth it for you? What if you are only owed a small amount? Is it worth your time to write it and the money to pay for registered mail or delivery? Before you send the letter, think about the worst case scenario and prepare yourself for that to happen. I suppose you could also prepare for the best case scenario (getting the money right away), but in my experience, and to throw around another cliché: hope for the best and prepare for the worst.
Until next time, enjoy writing your concise, accurate and succinct demand letters. Well, hopefully you don’t have to write more than one (and if you do, stop lending people money).