When someone owes you money and it is clear that they are purposefully delaying or avoiding payment, it may be time to take legal action. Filing a collection lawsuit gets the court involved in settling the dispute, but it can be expensive and time-consuming. Before you file, consider sending a demand letter to the debtor; it may prompt them to pay and it could avoid a lawsuit.
Format the letter like a business letter; you want the appearance to professional and organised. According to Purdue University's Online Writing Lab, the letter should be block format -- the paragraphs are left justified and single spaced except for a double space between paragraphs.
Write your address at the top of the letter. Include the date beneath your address. Type the recipient's address beneath the date.
Begin the letter cordially with "Dear [Debtor's Name]." Keep the tone of the letter stern, but professional and polite.
Explain the nature of the dispute briefly in the first paragraph. Reiterate how the debt arose and what efforts have been made to collect.
Demand payment. Provide the exact amount owed and instruct the debtor to pay or respond within a certain time. Describe what you intend to do if the debtor fails to respond, such as file a lawsuit.
Proof read the letter for spelling and grammar mistakes. Print the letter and sign it. Send the letter to the debtor.
While the letter should be stern and direct, it should not be threatening or degrading to the debtor. According to Legal Zoom, a threatening or degrading letter will only frustrate the process and the debtor may be able to use the letter against you if the matter goes to court.