Legal Information for Entrepreneurs

Attorney Letter Demanding Payment

An attorney letter demanding payment for a late payable is often the most effective way to collect a business debt. Before you hire a collection agency or sue to collect what's owed to you, consider sending a collections letter from your attorney.

Wouldn't it be great if all of your customers paid you on time, every time?

Unfortunately, that's probably never going to happen. There will always be some customers who can't - or won't - pay their bill in a timely manner. When that occurs, many small business owners ask their attorneys to write a threatening letter. But do letters from attorneys really work?

Attorney letters demanding payment can be an effective tool for recouping bad debts. By sending a collection letter on your attorney's letterhead, the urgency of the situation is ramped up and the late-paying client is forewarned of the legal consequences of refusing to make good on his debts.

More importantly, the document itself can be used to lay a foundation for further legal proceedings if you ultimately need to take the customer to court. Although the letter itself should be drafted by your attorney, it needs to contain the following elements to be effective.


The letter should discuss details regarding the history of the dispute. Even though this will serve to remind the customer about the steps that have brought you to this point, it is really for the judge's benefit should you need to pursue the matter through legal avenues.

Be sure to include information about the products or services provided, the amount owed, and previous collection efforts.


No matter how annoyed you are, the tone of the letter should remain polite . An angry letter will only further alienate the customer and strengthen his resolve to delay payment as long as possible. An impolite letter may also run the risk of creating sympathy for the customer in a later legal battle.

Specific Requests

Presumably, the reason you are writing the letter is to evoke a response from the customer. With that in mind, the letter should include specifics about how what you expect to achieve as a result of the correspondence and how you expect your client to respond.

Provide details about what you want, including a response deadline, manner of payment, and other relevant information. The requests you include in the letter will establish a standard against which you (and the court) can gauge the customer's subsequent actions.


What will happen if the customer fails to adequately respond to the letter?

Although you may have an idea what your next step will be, it's important to use the letter to notify the customer about the consequences of continued nonpayment. It is fairly common for attorney letters to notify the customer that the next step will be to pursue the unpaid balance in court.

Assuming the customer wants to avoid being sued and having to go to court, the letter may be the incentive they need to bring their account up-to-date. Additionally, a discussion of the consequences of nonpayment will show the court that your decision to pursue legal action was not impulsive, but happened after you had exhausted all of your other options.

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