Author: Hilary P. Chase, Licensed Paralegal
Receiving a demand letter for a matter that can be pursued in the Ontario Small Claims Court can be intimidating. You may have a wide variety of responses you want to take, but the reality is that it is much better for you to get ahead of the problem. There are a few questions to consider upon receipt of such a letter:
Who is sending you the demand letter?
When is the amount in the demand letter due?
Why is the other party claiming you owe them money?
What method of response do they prefer?
How do they expect you to pay should you agree the amount is owing?
Who is sending you the demand letter can be incredibly important because it helps you establish whether you have a relationship with the organization or person sending the letter. It can indicate to you whether the other party has legal representation, or if they are self-represented.
Knowing when the amount stated in the demand letter is due gives you the chance to respond in a timely manner. Whether your response is to inform the other party that you do not believe there is an amount owing, or you would like to enter into negotiations regarding the amount, it is important that you address the issue, as opposed to ignoring it.
Being aware of why the other party is under the impression that you owe them money allows you the opportunity to resolve any misunderstandings, should they exist. Common occurrences include outstanding accounts, or contractual matters where the other party is claiming you did not hold up your end of the agreement.
The method of response is important. If the other party has legal representation, they likely do not want to hear from you, personally. It is best practice that you communicate with their representation, or acquire representation of your own to communicate on your behalf. But if they are reaching out to you personally, that doesn’t mean you’re obligated to solve this on your own. You should still acquire representation to communicate with the other party, especially if you feel ill-equipped to communicate on your own.
How they are going to accept payment is important. If they have legal representation, they may be allowing those representatives to receive the amount, in trust, on their behalf. It’s crucial that if you decide to respond to a demand letter with payment, that the details for the cheque, bank draft, or wire transfer are correct.
Seeking out the support of a legal professional can help you determine what your next best steps are in responding to a demand letter. Handling the situation on your own can be overwhelming, we’re happy to help you navigate the process. If you are interested in collecting by way of a demand letter, negotiations or small claims give us a call at (647) 494-9599 or email us at info@law365.ca.
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