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How Much Does a Lawyer Charge For a Demand Letter?

It is all too common for businesses that sell goods or services on credit to have to resort to collection efforts to receive payment. Common collection methods include:

Sending an invoice;
Contacting the individual to remind them that payment is due;
Selling the debt to a collection agency; and
Send a demand letter threatening litigation if the debt is not paid.

Each of these approaches can be effective means of collecting a delinquent debt. In this article we focus on the demand letter.

What is a Demand Letter?

A demand letter, quite simply, is a communication in which the send demands something of the recipient. For often than not, the demand letter asks for payment. It may, however, demand that an individual cease or discontinue an activity. Generally the demand letter is a written (typed) letter in hard copy, but it can be an email as well. Demand letters are commonly a last resort in collecting a debt before either selling the debt to a professional collection agency or bringing a legal action against the debtor.

If you have more questions about demand letters, try LawTrade’s free question-and-answer service.

Why Are Demand Letters Useful?

Generally, a demand letter is written by an attorney. Though, there is nothing stopping a non-legal employee within a company from writing a demand letter. The demand letter generally states the conditions under which the payment is owed. It then states the state or federal statute that makes non-payment of a debt actionable in a court of law. It then restates the debt owed, which may include principal and any late penalties and interest. It will also state certain mandatory Fair Debt Collection Practices Act disclosures at the bottom or on the back of the letter. The fact that the letter states a legal cause of action and comes from an attorney makes it very intimidating to the recipient. It is this intimidation fact that drives many debtors to pay a delinquent debt.

What Will the Attorney Charge to Write a Demand Letter?

This answer depends upon the attorney. If the attorney agrees to write the demand letter without any further obligation of representation, she may do it at a fixed price. This will vary between $200-1000, depending on the length and complexity of the claim and legal issue. If the attorney agrees to represent the creditor in all collection efforts, she will generally charge a contingency fee. That is, she will accept a percentage of any amounts recovered as payment for her services. The common contingency fee ranges between 30-40%. If the demand letter is successful, the attorney will earn her fee for very little effort. If the demand letter is not successful, the next option is to bring a legal action. Most legal actions for non-payment take place in a magistrate or small-claims court. If, however, the debt is a large amount, the case could end up before a jury in a state court of general jurisdiction.

LawTrades Knows Debt Collections

Debt collection is not an enjoyable process. Unfortunately, it is a necessary part of doing business. If you need debt collection help, contact the legal professionals at LawTrades. They can advise you on the debt collection process. They can also provide debt collection services, such as writing demand letters.