When a person agrees to borrow money from another person or entity and promises that they will pay it back, they effectively take out a loan from the individual that extended them the cash. The individual who takes the money is known as the borrower, and the person or entity that gave them the money is the lender or creditor. Transactions like this happen all over Tennessee each and every day, and when borrowers successfully comply with the terms of their loans, they may eventually pay back their lenders.
Often, though, for many diverse reasons, borrowers may stop making payments on their loans or may fall behind on what they owe to their creditors. When this happens, creditors may wish to take action to recover the money that they have extended to their borrowers. One of the first steps they may take is to send their borrowers demand letters.
A demand letter is exactly what it sounds like: a demand for repayment. In a demand letter, a creditor may lay out the terms of their loan with the borrower and identify how and when the borrower defaulted on their agreement. Demand letters may state exactly what the creditor wants – repayment – but may also include alternative remedies such as litigation.
Crafting an effective demand letter can save a lender time and money if they are able to secure repayment of their loan without having to escalate their matter to a more involved process. For this reason, many creditors choose to work with business and banking attorneys who understand their creditor clients’ loan recovery needs. More help with this topic and other creditors’ rights issues can be sought from trusted legal professionals. This will help ensure your rights and interests are protected.