2.4 Sending a Demand Letter

• Library: Debt Collection for Virginia Lawyers: A Systematic Approach (Virginia CLE) (2022 Ed.)

2.4 SENDING A DEMAND LETTER

2.401 In General.

The last step in the process of opening a file is sending a demand letter. The letter should make clear to the debtor what is expected of him or her. The debtor should be informed that the attorney's office is handling the claim, that payments or arrangements are to be made to or with the attorney's office, and the timeframe in which the attorney expects to hear from the debtor. Having opened the file and sent an acknowledgment and demand letter, the firm should now update its computer or note on a tickler file or file card the date on which further action will be taken.

2.402 Commercial Demand and Follow-Up.

Commercial claims are contested more often than are retail claims. Generally, follow-up calls to a business are recommended to make contact and ascertain that the business is still operating. The attorney should ask if there is a dispute and try to find out why the debtor has not paid. If it would be appropriate, the attorney should also try to set up payment arrangements in this initial telephone interview. In some cases, the attorney may also make personal inspection of the premises in order to better advise the client about the nature and scope of the business operation and make reasonable recommendations concerning suit. Each case should be handled separately, and often it is possible to predict the probability of collection before suit is filed. Often, if no response has been received, a telephone call to a commercial debtor will tell the attorney that it is out of business, doing business under a different name, or that another attorney has already handled this case and the client is being unreasonable. Therefore, the demand should be nonspecific as to what the attorney intends to do. ¹³⁹

Many businesses, particularly small ones, use voice mail rather than having employees answer the telephone. The attorney should always leave a detailed message, providing the attorney's name and telephone number and the purpose of the call. The attorney should invite the debtor to call and work out the account or explain why the account has not been paid. The attorney should maintain a pleasant tone, conveying the message that he or she wants to resolve the matter. If the attorney does not receive a return call, this should be reported to the forwarder.

Many commercial debtors respond to this initial call, and many of the accounts are resolved successfully. Also, attorneys often learn the other side of the story...