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A demand letter is typically the first step people take to try to resolve their dispute. Demand letters are designed to communicate your demands to another party and provide notice of your intent to sue. If you've recently sent a demand letter, you may be wondering what your next steps should be. Below, we explore some of the options available to you, like negotiating a settlement, participating in mediation, or suing in small claims court.
Did you know People Clerk can help you navigate small claims? Learn more.
Possible Outcomes After Sending a Demand Letter
Generally, after you send a demand letter, there are three possible outcomes:
Your demands are met. In an ideal scenario, the recipient of the demand letter agrees to your demands, and you both arrive at a final settlement shortly after sending the letter.
You get a response, but the recipient wants to discuss further. In such a case, the other party may need more time to decide about the terms of a possible agreement or clarify specific demands further.
Your letter is ignored, or the other party refuses to meet your demands. In some situations, the other party may choose not to respond. This could indicate that they are not taking your claim seriously, or they simply disagree with your terms.
Learn more about the effectiveness of demand letters.
Wait to Recieve an Offer to Settle
After sending a demand letter, the first step is to wait for a response by the deadline you provided. If your demand letter worked, you should expect a settlement within a couple of weeks. However, the time you have to wait for a settlement may vary based on different factors.
For example, if your dispute was against a landlord for a security deposit, you should expect a response quicker than if your dispute was against a business like a car dealership.
Learn more about the factors that can affect by when you can reach a settlement.
Did You Receive a Response to Discuss the Issue Further?
Did the other party say they were open to potentially settling but wanted to discuss some of your demands further? Below, we discuss possible next steps if you find yourself in this situation.
In your demand letter, you may have stated you were open to participating in mediation as a way to reach a possible settlement. If this is the case, the other party may reach out and say they are also willing to participate in mediation.
Mediation is a meeting between you, the other party, and a neutral third individual, called a mediator, who helps facilitate discussions between parties.
The goal of mediation is to reach a mutually beneficial solution. The mediator is not there to make a decision for you.
Mediation can be a good option for resolving disputes between two parties that have a prior relationship. For example, if your neighbor accidentally damaged your front lawn while parking their car, and you want them to cover the repair costs, mediation could be a suitable option for resolving the issue while maintaining a positive neighborly relationship.
Consider Consulting With an Attorney to Help You Negotiate
The other party may have reached out to start negotiations with you. Depending on the problem at hand, the negotiation process can be a very informal back-and-forth.
For example, your ex-roommate owes you money, so you sent them a demand letter. In this instance, your roommate may respond with a counteroffer or payment plan option.
The negotiation process between you and your ex-roommate should be fairly straightforward.
However, if the demand letter relates to a more complex legal matter, it may be worth seeking legal advice from an attorney to help you through a more formal negotiation process.
For example, you were in a car accident and sent a demand letter to the other driver’s insurance company to cover your vehicle damage.
An attorney can help review the situation and provide guidance on the next steps to take with the insurance company.
Find an attorney that has experience negotiating issues that pertain to your situation. In the case above, you may want to consult with a personal injury attorney if you were also injured in the car accident.
Take Further Action
Did you not receive a response from the other party, or did the other party reject your demand letter requests outright? Consider taking the following steps to resolve your dispute:
Send a final demand letter.
Sue in small claims court.
Send a Final Demand Letter
Consider sending a final demand letter if you have already sent a demand letter to the other party. The other party may need one final notice or another opportunity to consider settling the dispute.
Did you know we have a free tool powered by AI that helps you create a final demand letter? Check out our demand letter tool.
Consider Suing in Small Claims Court
Small claims court is a type of court designed to resolve legal disputes involving small amounts of money. Small claims court is intended to be a quick, inexpensive, and simple way for individuals and businesses to resolve disputes without hiring an attorney or going through the formal court process.
Here are some common types of lawsuits filed in small claims court:
Your landlord did not return your security deposit.
Someone hit your car and won’t pay to reimburse you for the costs of fixing your car.
Your clients won't pay you for services rendered or issue unjustified chargebacks.
You lent someone money, and they won't pay you back.
You hired a mechanic to repair your car, and they did a terrible job.
You contracted with a painter to come paint your home, but they never show up.
You paid a contractor to fix your roof, but they never showed up.
An airline lost or damaged your bags.
Your tenant refuses to pay rent.
Factors to consider when deciding to sue in small claims court:
The cost of going to small claims court. Small claims court is almost always a more affordable option than regular court. In small claims court, you can represent yourself (meaning you don’t have to pay legal fees to an attorney), and the cost to file is usually between $15-$75. This amount varies by state and even by court, so confirm by checking your local court’s website.
The amount you can sue for in small claims court. Each small claims court will have a limit on how much you can sue someone for, this is called the small claims limit. This limit also varies by state and even by court. Usually, the amount you can sue for is around $10,000.
Is your type of lawsuit commonly filed in small claims court? Many of our clients want to know if their case will be successful in court. Unfortunately, each case is unique, and there are no guarantees in court. If your case pertains to a common dispute type tried in small claims court, you can expect that judges will have a basic understanding of the matter, allowing for a well-reasoned and informed decision.
How much time and effort is required to sue someone in small claims court? Small claims courts were designed to be more efficient than regular courts; however, there is still some preparation involved. Luckily People Clerk can help you prepare, file and serve your small claims lawsuit from the comfort of your home.
Try not to take too long to decide whether or not to file a small claims lawsuit. Why? Because every state has set deadlines, called statutes of limitations, that let you know by when you should sue someone. Waiting too long could mean missing this deadline.
Did you know People Clerk can help you navigate small claims? Learn more.
Legal Educator @ People Clerk. Claudia holds a J.D. degree and is a certified mediator in New York and Florida. She has participated in dozens of small claims mediations in New York City courts.