What is a demand letter?

A demand letter is a legal document sent by a creditor to a debtor that states the amount of money the debtor owes and demands payment. The letter will typically outline the amount of money owed, the date the debt should be paid, the consequences of not paying, and contact information. In California, the creditor may send a demand letter to the debtor before filing a lawsuit. The letter may also be sent as part of an effort to settle the dispute outside of court. Demand letters are an important step in the legal process. They are a way for creditors to communicate with debtors and try to resolve the debt without resorting to a lawsuit. The letter serves as legal notification that the creditor is taking action and the debtor should take action to pay the debt or face the legal consequences. In California, the demand letter must comply with several state laws, including the Rosenthal Fair Debt Collection Practices Act. Under this law, the creditor must clearly state the amount of money owed and describe the consequences of not paying the debt. The letter must also provide the debtor with contact information for the creditor. When a debtor receives a demand letter, they should take immediate action to address the debt. Ignoring the letter or failing to pay could lead to a court case. If a debtor wishes to dispute the debt, they should contact the creditor immediately and submit any evidence they have. If a settlement can be reached, both the creditor and debtor should sign a written agreement.

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