Whenever a plaintiff thinks about filing the small claims, mostly the first step to do is to send the demand letter to the defendant. It is an official request from the plaintiff to the defendant to tell them that they need to fulfill their obligation. More than 80% of civil cases start with a demand letter in the USA. Studies show that 40% of them ignore the demand letter and bear the loss.
This is the important question: “How long do you have to respond to a demand letter?” and you must know its answer. If you are late to respond to the demand letter, you may have to bear the costly consequences.
This article will describe all the information about demand letters that you must know to respond properly.
What Is a Demand Letter?
A demand letter is an official letter. It is used to send by an individual or business to the defendant. A demand letter has the following key points:
- It explains the detailed statement of the complaint.
- It describes the claimed amount that a defendant owes.
- It also describes the deadline of the defendant’s response.
- It is also mentioned in the demand letter what the consequences will be if the defendant does not respond.
How Long Do You Have to Respond to a Demand Letter?
The answer to this question is not specific, as the time duration of responding to the demand letter depends on many factors, such as:
Deadline Specified in the Demand Letter:
YMost of the time, the deadline to respond to the demand letter is mentioned in the demand letter by the plaintiff. It generally mentions the deadline from 7 to 30 days. In this time duration, you can study the claim details and can prepare yourself to take the best action.
Statute of Limitations:
Some small claims, such as debt lawsuits and breaches of contract, etc., require following the statute of limitations. This can be challenging for you as a defendant to face. For example, if any state has a statute of limitations of 4 years for any dispute. Now the plaintiff may send you the demand letter at the last month of the duration. In this you may have a short time frame to respond to the demand letter.
Court-Ordered Deadlines
Sometimes the demand letter is linked to the court order for settlement purposes. This type of demand letter has the deadline set by the court. The court can impose the deadline and must respond within the time limit. If you fail to respond within the time limit, you will have to face serious issues.
Legal Jurisdiction:
The time duration to respond to the demand letter also depends on the jurisdiction of the state. Some jurisdictions have strict time limits, and some of them may have flexibility in the time limit.
Nature of the Dispute:
There are many different types of small claims, and they have different time limits for responding to the demand letter. For example, generally, a debt lawsuit gives you the 30-day time duration to respond to the demand letter. Business contracts may have some strict time limit, generally from 7 to 14 days, to respond to the demand letter.
What Happens If You Ignore a Demand Letter?
If you fail to respond to the demand letter, you may have to bear the serious and costly problems. Following are some common issues that you may have to face as a result of not responding to the demand letter:
Lawsuit Filing:
If you did not respond to the demand letter, the plaintiff will move forward to file the lawsuit in the court. This will push you to attend the court trial, and you will be imposed by the court to pay the compensation.
Legal Fees and Costs:
If the plaintiff wins the case, you will need to pay the compensation as well as the court fee, attorney fee, or any other expense the plaintiff has paid to file the lawsuit.
Default Judgment:
If you fail to respond to the demand letter, the court can give the default judgment to the plaintiff against you. In this way the plaintiff gets the favor from the court.
Loss of Opportunity to Settle:
If you do not respond to the demand letter, you will lose the chance of settlement without going to court.
Credit Damage:
Failing to respond to the demand letter can result in your credit being damaged. If the demand letter is about the debt lawsuit and you failed to respond to the demand letter, the case will go to the collection of the debt, and it will damage your credit score.
How to Respond to a Demand Letter Effectively:
Following are some ways to respond to the demand letter effectively:
Don’t Ignore It:
This is the best practice to respond to the demand letter. If you ignore it, the plaintiff will move forward to file the lawsuit.
Review the Letter Thoroughly:
You must study the demand letter carefully. You need to understand the nature of the demand letter. You always check the deadline for responding to the demand letter and read the outline of the consequences in case of ignoring the demand letter.
Consult an Attorney:
If you find the demand letter complex or have the big claimed amount, you can hire the lawyer to take the expert legal advice. The lawyer can guide you on how to respond to the demand letter effectively. A lawyer can also draft a professional response letter to the demand letter.
Draft a Response Letter:
You must prepare an effective response letter to respond to the demand letter. A best response letter has the following important points included in it:
- It must describe the acknowledgment of the receipt.
- It should contain the agreement or denial of the demand letter. You can also add the request for more information
- TYou can add any reference of the proof you have that may support your position.
- Write clearly your next step to inform the plaintiff.
Keep Records:
You always keep the record of the response of the demand letter for future reference. If you mail the response letter, you must use the certified mail for proof.
Case Study
A former landlord sent a demand letter demanding $3,000 for unpaid rent to John. John just ignored the demand letter and thought that the former would forget it and all would go well. After two months John received the court papers of the lawsuit. John also does not respond to the lawsuit papers, and the former gets the default judgment. As a result, his wages are garnished.
Conclusion
How long you have to respond to a demand letter depends on many factors and situations. Generally, demand letters have the deadline of 7 to 30 days, but statutes of limitations, legal obligations, court orders, etc., may have different time durations. This is the best practice to respond to the demand letter. If you ignore it, the plaintiff will move forward to file the lawsuit. You must study the demand letter carefully. You need to understand the nature of the demand letter and always check the deadline for responding to the demand letter. If you find the demand letter complex or have the big claimed amount, you can hire the lawyer to take the expert legal advice. You must prepare an effective response letter to respond to the demand letter. You always keep the record of the response of the demand letter for future reference. If you mail the response letter, you must use the certified mail for proof.
