Ignoring a demand letter—especially if you don't read it at all—usually leaves the obligee with little alternative but to take formal legal action against you or your company, sometimes sooner than they would have otherwise. While there are times when this may be desirable (for example, if you know you will not pay the debt), most often these letters are used as a first step by creditors to try and collect money they are owed. Creditors write these letters because they want to scare you into paying. If you ignore such a letter, they will usually send another one demanding payment. Sometimes they will even call your company's phone system looking for you.
It is important to remember that creditors need to show good faith in order to be able to ask you to pay debts. They cannot just send you a letter without talking to you first. They also cannot just send you a letter and then start calling people who might have information about you. If they do so, they could end up in court facing serious charges including harassment and extortion.
In addition to being sent to scaring you into paying, demand letters are also used as a tool for gathering evidence for lawsuits. This means that ignoring them could actually lead to problems for you in the long run.
Ignoring a demand letter might swiftly result in judicial procedures being initiated against you. This can be an expensive and time-consuming procedure. Responding to a letter of demand gives you the opportunity to avoid that process and handle the situation commercially.
If you ignore a letter of demand, you are saying that you do not agree with any of the allegations made by the creditor. You are also telling them that you intend to contest these claims through court proceedings.
This will cause the creditor to file a lawsuit against you to recover its money. They will probably send you a copy of the complaint along with the notice of suit. If you fail to respond within 30 days, a default judgment may be entered against you in favor of the creditor. This means that they would get a judgment against you in their favor for the amount owed plus costs and fees. A default judgment is a judgment based solely on the evidence presented at trial or through affidavits. There is no right to a jury trial in debt collection cases.
It is important to remember that even though you are ignoring a letter of demand, the creditor still has the legal right to collect its money. It is only doing so that could lead to problems.
The best thing to do if you are ignored is to call the creditor and make sure that they have taken your failure to reply into account.
Never disregard a demand letter. If you receive one, call your lawyer right once. Some people believe that if they do not answer, the sender would disappear. This is not always the case, especially if the other side has hired an attorney. Respond and attempt to settle the matter, or you risk going to court. It is best to be proactive rather than reactive in these situations.
If you are asked to pay up front, ask for evidence that the debt is real and tell the person to contact your credit card company or bank. You have done nothing wrong, so there is no need to pay before seeking legal advice.
If you do end up paying, follow up with a phone call or email as soon as possible to let them know that you have paid and ask what else you need to do to get this matter resolved.
Demand letters are used by creditors to get money quickly. They will usually give you a few days to respond, but after that, they may start calling you or coming to your house with a sheriff's deputy to take things further.
If you are being demanded to pay off a debt, talk to your creditor first to see how you can work out a payment plan. Most debts can be settled through communication - you just need to try hard enough!
Your failure to respond to the demand letter will be used against you in court. Failure to respond to a demand letter that raises the question of a continuous breach of contract or infringement of a party's rights may subsequently be used as evidence of purposeful or willful behavior.
What should I do if I do not receive a response to my demand letter? If your demand is disregarded or the receiver refuses to comply to the demands in the letter, you will need to initiate a lawsuit. The failure to respond to a demand letter may result in a judgment being entered against you for damages or legal fees.
A letter that does not contain all of the required information cannot be considered valid documentation of debt. Therefore, any company that receives such a letter cannot legally proceed with collection activities against you.
Companies that send out many form letters will see a rise in invalid responses. To avoid costly mistakes, they will include some basic information in most letters. This includes your full name, address, and the amount owed. Many companies will also list their business address and phone number. These are necessary for them to communicate with you about any changes to your account or if there is an issue with an invoice.
If you fail to pay a bill within the specified time frame, it becomes due and payable. Your lender has the legal right to collect past-due payments in whatever manner they see fit. They can go after your credit report or contact your other creditors to get them to share information about your debt.