Your demand letter was ignored — what happens next

If a demand letter passes its deadline with no reply, the choice is to file or to drop it. Filing means small claims court for most disputes: no lawyer required in most states, filing fees typically under $100, and a hearing within weeks or a few months. The demand letter you already sent becomes exhibit one.

First, four checks

1. The limitation period. Two to six years depending on the state and on whether the agreement was written or oral. It runs from breach, not from your last request. If you are near the edge, file — nothing else stops the clock.
2. The small-claims ceiling. Roughly $2,500 to $25,000 across the states (Texas $20,000, California $12,500 for individuals, New York City $10,000). Above it you either file in civil court or deliberately waive the excess to stay in small claims — waiving is often the rational trade, because civil court means procedure, delay and usually a lawyer.
3. The right defendant. Sue the legal entity that owes the money: the LLC named on the invoice, not its owner; the individual who signed the note, not their spouse. A judgment against the wrong name is uncollectable.
4. Venue. Usually the county where the defendant lives or does business, or where the contract was performed. Filing in the wrong court wastes the fee.

What actually wins these hearings

Small claims is decided on documents and credibility, in about fifteen minutes. Bring, in order:

• the contract, invoice or note — whatever created the obligation;
• proof you performed — delivery confirmation, photos, sign-off, texts saying the work was fine;
• a ledger of what was paid and what is outstanding;
• the demand letter and the certified-mail receipt with the signed card;
• anything the defendant wrote that acknowledges the debt.

That last item is worth more than argument. A text saying "I'll pay you next month" is an admission — and in most states a written acknowledgment or a part payment also restarts the limitation clock in your favour.

What the defendant will say

Three defences appear over and over: the work was defective, the amount was different, or the claim is too old. The first two are answered with documents produced at the time, not with indignation. The third is answered by having checked the limitation period before you filed.

If the defendant has a genuine counterclaim, expect the court to hear both in one go. That is another reason the demand letter should have stated the facts carefully: contradicting your own letter under oath is a bad afternoon.

Winning is not collecting

A judgment is an entitlement, not money. Collection is a separate process and the debtor's cooperation is optional:

• Wage garnishment, where the state allows it and the debtor is employed;
• Bank levy, if you can identify the account;
• Property lien, which quietly gets paid when the debtor sells or refinances;
• Debtor's examination, a court-ordered hearing where the debtor must disclose assets under oath.

Judgments accrue interest at the statutory rate and last for years — commonly five to twenty, and renewable in most states. Against a defendant with income or property, patience collects. Against a defendant with neither, a judgment may sit unpaid, which is worth knowing before you spend the filing fee.

When to settle instead

A payment plan you can actually collect usually beats a judgment you cannot. If the debtor responds late with a serious offer, take it in writing, state that it is in full and final settlement only on completion, and keep the right to enter judgment for the balance if payments stop.

Start with a letter that supports the filing

Our guided demand letter produces the version of this document a judge reads well: dated facts, an exact amount, a stated deadline, civil consequences only, and a reservation of rights — with warnings before you send if the claim looks time-barred or the deadline is too short.

→ Demand letter

Related: how to write a demand letter that gets paid · security deposit demand letter.