Advantages
- Free or very low cost
- Quick to send
- Preserves relationship
- No court appearance needed
- Private resolution
Limitations
- Not legally enforceable
- Can be ignored
- No guarantee of payment
Advantages
- Legally binding judgment
- Can garnish wages/accounts
- No attorney needed
- Formal court order
Limitations
- Filing fees required
- Must appear in court
- Takes weeks to resolve
- Public record
- Collection not guaranteed
Side-by-Side Comparison
| Factor | Demand Letter | Small Claims |
|---|---|---|
| Total Cost | $0-50 | $30-75 + service |
| Time Investment | 30 min - 1 hour | 4-8 hours total |
| Resolution Speed | 1-4 weeks | 2-3 months |
| Legal Force | Persuasive only | Court judgment |
| Privacy | Private | Public record |
| Relationship Impact | Lower conflict | Higher conflict |
| Best For | First attempt, reasonable parties | Unresponsive defendants |
* Demand letter success rates vary by situation. ** Small claims win rates for plaintiffs with documentation.
Which Should You Choose?
Step 1: Have you already asked for payment?
If yes, the other party knows they owe you. If no, a demand letter is your formal first ask.
Step 2: Is the other party reasonable?
If they're willing to discuss, a demand letter may resolve it. If they're ignoring you, court may be necessary.
Step 3: Do you value the relationship?
Demand letters are less adversarial. Court creates a public record and escalates conflict.
Step 4: Can you afford to wait?
Demand letters are faster. Court takes 2-3 months plus potential collection time.
Start with Demand Letter If...
First formal request, reasonable defendant, want to preserve relationship, need quick resolution
Go to Small Claims If...
Already sent demand, defendant unresponsive, need legal enforcement, relationship already damaged
Our Recommendation: The Two-Step Approach
Step 1: Send a Demand Letter First
- It's free and takes 30 minutes
- Resolves 30-50% of disputes without court
- Shows you're serious and documented
- Required by some courts before filing
- Creates evidence for court if needed
Step 2: File Small Claims If No Response
- File after 14-30 days with no response
- Attach your demand letter as evidence
- Judge sees you tried to resolve first
- Stronger case with documentation
- Defendant often settles after being served
Ready to Start with a Demand Letter?
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