Key Features
- Formal notice. Gives a written understanding of what the recipient is doing wrong and how to cure the issue.
- Offers a settlement. Allows the recipient the chance to resolve the matter without going to court.
- Gives a deadline. Informs the recipient that a response is required by a specific date or legal action will take place.
- Lists consequences. Penalties should be mentioned to motivate the recipient to act if the matter is unresolved.
By Type (22)
How to Send a Demand Letter (5 steps)
1. Decide the Demands
For monetary demands, it is best to keep the amount below the small claims limit within the state. This allows the plaintiff the fastest way to obtain a judgment and resolve the matter if the debtor does not respond.
For a breach of contract, the demand should outline how the defendant violated their agreement and, if immediate harm is being caused, how an injunction may be filed in conjunction with filing for damages.
4. File a Lawsuit (if Defendant is unresponsive)
If the defendant does not respond, legal action is necessary to make a claim against the individual or entity.
Monetary Demands
- Small Claims Court: For damages below the small claims threshold; or
- County (Superior) Court: For damages above the small claims threshold;
Breach of Contract
- County (Superior) Court: For all breach of contract matters. This includes filing a TRO (temporary restraining order) or injunction if immediate action is needed.
5. Judgment is Rendered
If the court rules in favor of the plaintiff, it commonly gives the defendant 30 days to make payment or file an appeal.
Defendant Refuses to Pay
If the defendant does not pay within the 30-day period, the plaintiff can file a Writ of Execution with the local court.
After filing, it will be served through the local Sheriff’s Dept., which allows the plaintiff to file a lien, garnish wages, or seize assets.
How Long Does a Settlement Take?
For small claims matters, it can take between 1 to 2 months to get a court date, depending on the jurisdiction. For example, it takes 20-70 days to schedule a hearing in Los Angeles County.[1]
Small Claims Limits ($) By State
| State | Maximum Amounts ($) | Statute |
| Alabama | $6,000 | § 12-12-31 |
| Alaska | $10,000 | § 22.15.040 |
| Arizona | $3,500 | § 22-503 |
| Arkansas | $5,000 | “Guide to Small Claims Court” |
| California | $10,000 for individuals or sole proprietors, $5,000 for corporations and other entities. | § 116.210-116.270 |
| Colorado | $7,500 | § 13-6-403 |
| Connecticut | $5,000 | § 51-15(d) |
| Delaware | $15,000 | § 9301 |
| Florida | $8,000 | Rule 7.010(b) |
| Georgia | $15,000 | § 15-10-2 |
| Hawaii | $5,000 | § 633-27, “Your Guide to Small Claims Court” |
| Idaho | $5,000 | § 1-2208(1)(a) |
| Illinois | $10,000 | Rule 281 |
| Indiana | $6,000 for employment-related, $10,000 for all other matters. | Rule 8(c), Small Claims Manual (2022) |
| Iowa | $6,500 | § 631.1 |
| Kansas | $4,000 | § 61-2703(a) |
| Kentucky | $2,500 | § 24A.230 |
| Louisiana | $5,000 | § 5202 |
| Maine | $6,000 | § 7482, “A Guide to Small Claims Cases” |
| Maryland | $5,000 | § 4-405 |
| Massachusetts | $7,000 | § 218-21 |
| Michigan | $6,000 | § 600.8401 |
| Minnesota | $15,000 | § 491A.01 |
| Mississippi | $3,500 | § 9-11-9 |
| Missouri | $5,000 | “Missouri Small Claims Court Handbook” |
| Montana | $7,000 | § 25-35-502 |
| Nebraska | $3,900 | § 25-2802, Small Claims |
| Nevada | $10,000 | § 73.010 |
| New Hampshire | $10,000 | § 503-1 |
| New Jersey | $3,000 | “New Jersey Judiciary Small Claims” |
| New Mexico | $10,000 | § 34-8a-3 |
| New York | $5,000 for City Courts, $3,000 in Town and Village Courts, $10,000 for New York City, and $5,000 for Nassau and Suffolk Counties | NY Small Claims |
| North Carolina | $10,000 | § 7A-210 |
| North Dakota | $15,000 | § 27-08.1-01 |
| Ohio | $6,000 | § 1925.02(A)(1) |
| Oklahoma | $10,000 | § 1751 |
| Oregon | $10,000 | § 55.011-55.140 |
| Pennsylvania | $12,000 | “Bringing Suit Before a Magisterial District Judge” |
| Rhode Island | $5,000 | § 10-16-1 |
| South Carolina | $7,500 | § 22-3-10 |
| South Dakota | $12,000 | § 15-39-45.1 |
| Tennessee | $25,000 | § 16-15-501(d) |
| Texas | $10,000 | § 26.042 |
| Utah | $11,000 | § 78A-8-102 |
| Vermont | $5,000 | “A Guide to Small Claims Proceedings in Vermont” |
| Virginia | $5,000 | § 16.1-122.2 |
| Washington | $5,000 | § 12.40.010 |
| Washington D.C. | $10,000 | § 11–1321 |
| West Virginia | $10,000 | § 50-2-1 |
| Wisconsin | $10,000 | § 799.01(d) |
| Wyoming | $6,000 | § 1-21-201 |