If your business has provided a customer a good or a service, the customer should pay for it. If you have sent them a bill and it is past due, you can send them a demand letter to enforce your rights to payment and initiate the collections process.
These letters, though, have to comply with Massachusetts' debt collection laws. If a demand letter breaks any of these laws, you could end up being the one paying the customer for the violation.
The business credit lawyers at the Katz Law Group help businesses in Massachusetts with their commercial collections needs.
Demand Letters Help Collect Debts
A demand letter does two things. It:
- Requests that someone pay the debt that they owe to your business, and
- Informs the debtor that you intend to take the debt to court if it is not paid.
The goal is to escalate the debt collection process from merely sending invoices and overdue notices to telling the debtor that the next step is to take them to court and compel payment.
In many cases, just sending the demand letter is enough to make the debtor pay what they owe. Whether the lack of payment was just an oversight on their part or they were deliberately trying to get away with not paying for the services you provided, the idea of being brought to court usually motivates them to pay.
All Demand Letters Have to Comply With Debt Collection Laws
Demand letters are simple, straightforward, and necessary for businesses to collect the payments they are entitled to receive. Unfortunately, they have been abused so badly in the past that Massachusetts has forbidden certain practices during this important stage of the collection process.
Massachusetts General Law Chapters 93 and 93A outline the collection tactics that are considered unfair in the state, while 940 CMR 7 lays out the regulations that enforce some of these laws.
Importantly, Massachusetts' debt collection laws set significant penalties for violations. A violation of Massachusetts' debt collection laws can lead to a penalty three times what the debtor owed, making it absolutely critical to abide by the law's restrictions.
How a Massachusetts Business Litigation Lawyer Can Help
Crafting a demand letter that suits your needs and that complies with state and federal consumer protection laws can be tricky. Not only does it have to abide by these legal restrictions, it should be professional and respectful, while also forceful enough to convince the debtor to pay. Demand letters should make it clear that you are willing to take the claim to court, while also making it unnecessary to take that final step.
The business litigation lawyers at the Katz Law Group have more than 35 years of experience writing demand letters that get results for clients in Marlborough, Worcester, Framingham, and the rest of Massachusetts. With their help, you can recover the money you are owed, while still preserving your business' reputation.
Contact them online or call their law office at (508) 480-8202.