A Guide to Preparing a Non-Sufficient Funds Demand Letter
Cash transactions are no longer the most common payment method, and customers often pay for services or goods with credit cards and checks. If deferred payment is not completed—i.e., the check bounces—you should send a non-sufficient funds demand letter.
When a check bounces, it means a bank cannot process it. While there are different reasons for this situation, it is usually because the person who wrote the check does not have enough funds in their account or has:
- Closed the account
- Given you a fraudulent check
- Requested a stop payment from the bank
Since you—as the receiver of the check—have a deficient payment together with a non-sufficient funds fee for a bounced check, you need to convince the breaching party to:
- Make the payment again
- Compensate you for any additional expenses
The best option to get in touch with your client is by sending them a demand letter informing them that they are in breach of contract since they have:
- Received goods or services from you
- Not provided payment, i.e., have not performed their contractual obligations
To understand better what you should and should not use in a non-sufficient funds demand letter, take a look at the following table:
|You Should||You Should Not|
When preparing a non-sufficient funds demand letter, you could use demand letter samples and templates as a guide, but make sure you provide the following:
- Date—While a date might seem irrelevant, you need to ensure to include it in your demand letter. It can be used as evidence if you end up suing for breach of contract
- Delivery address—Keep in mind that you should provide the address where you want the client to send or hand-deliver the payment. You do not want them to waste time searching for the venue
- Contact phone and email—You could provide contact details for the client if they decide to get in touch with you
- Bounced check details—To remind your client of the deal you had, you should include the details of the check, such as:
- Payee’s name
- Name of the bank that returned the check
- Payment deadline—You should specify how long your client has to make the payment
- Additional costs—If you would like the breaching party to settle any extra expenses you have had due to the bounced check, you need to list the exact amounts. These figures can include:
- Bad check fees the bank has charged you for processing
- Costs of mailing the demand letter
- Additional damages or penalties (you need to consult your state laws if you decide to include penalties)
Since drawing up a demand letter is demanding, you should use the assistance of our AI-powered app. We possess a vast database with relevant state laws and will make sure your letter complies with them (regardless of the type of breach—material, anticipatory, or any other).
Here is what you should do—register for DoNotPay and follow these steps:
- Access our Client Breach of Contract product
- Enter the specifics of your agreement, including:
- Name of your customer
- Terms of the agreement
- Payment deadline
- Amount the other party owes you
- Provide the final payment date
- Upload any documents to support your claim, if possible
Once you have entered the details, DoNotPay generates a demand letter you can mail to your customer right away.
Here are some steps you could take before and after sending a hot check demand letter:
|Before Mailing the Letter||After Sending the Letter|
||If the deadline you have indicated in your demand letter has passed, you could:
Keep in mind that at a court of law, you will need to:
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