Arkansas Demand Letter

Introduction

Key Things to Know

1. 1

   Arkansas's civil bad-check statute, Ark. Code Ann. Section 4-60-103, is a two-step process: a first written demand gives the drawer 15 days to pay the check amount plus a collection fee capped at $30 and any bank fees, and only if that fails does a second demand, sent by certified mail, return receipt requested, start a fresh 30-day clock that, once it also lapses, entitles you to twice the check amount, but not less than $50, plus fees. This civil statute is separate from Arkansas's criminal Hot Check Law, which separately lets a payee send its own 10-day notice before referral for criminal prosecution (Section 5-37-303); a civil demand should not be conflated with that criminal notice.

2. 2

   The Arkansas Deceptive Trade Practices Act does not require a demand letter or any other notice before an individual sues for damages: Ark. Code Ann. Section 4-88-113(f) conditions the private right of action only on proving an actual financial loss from reliance on an unlawful practice, and a private plaintiff may recover actual financial loss, not multiplied damages, plus a discretionary award of reasonable attorney's fees.

3. 3

   Arkansas lets the prevailing party recover reasonable attorney's fees in an action on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, a contract for goods, services, or labor, or breach of contract (Ark. Code Ann. Section 16-22-308), but the award is discretionary with the court and is not conditioned on presenting the claim before filing suit, unlike a state with a formal presentment statute.

4. 4

   Arkansas's own debt collection act, Ark. Code Ann. Section 17-24-501 et seq., excludes an officer or employee of a creditor collecting debts in the creditor's own name (Section 17-24-502(5)(D)(i)), so a first-party creditor is covered only if it uses a name suggesting a third party is collecting (Section 17-24-502(5)(B)). A covered debt collector may not represent that nonpayment will lead to arrest, imprisonment, or seizure of property or wages unless that action is lawful and the collector intends to take it (Section 17-24-506(b)(4)).

5. 5

   Regardless of whether Arkansas's debt collection act applies to your letter, never threaten arrest, jail, or criminal prosecution to collect a civil debt. Keep the letter's tone factual: state the facts, the amount owed, and your deadline.

6. 6

   Arkansas gives 5 years to sue on a written obligation (Ark. Code Ann. Section 16-56-111(a)), and 3 years to sue on an oral or unwritten contract, an open account, or for taking or injuring goods or chattels (Section 16-56-105(1), (3), (6)). A partial payment or written acknowledgment of default tolls the 5-year period for a written obligation (Section 16-56-111(b)).

7. 7

   If your contract is silent on a rate, Arkansas sets legal interest at 6 percent a year (Ark. Code Ann. Section 4-57-101(d)). If you sue, Arkansas's Small Claims Court, a division of the Arkansas District Court, hears disputes under $5,000, exclusive of interest and costs, without attorneys, and bars collection agencies and money lenders from filing there at all; a larger claim must be filed outside Small Claims Court instead.

Arkansas Requirements for Demand Letter

• Two-Step Civil Bad-Check Demand

  Ark. Code Ann. Section 4-60-103 is a two-step civil demand process: a first written demand gives the drawer 15 days to pay the check amount plus a collection fee capped at $30 and any bank fees, and only if that fails does a second written demand start a fresh 30-day period before the drawer becomes liable for twice the check amount, but not less than $50, plus fees.

• Certified Mail Required Only for the Second Demand

  The first bad-check demand under Ark. Code Ann. Section 4-60-103(a) may be mailed or delivered to the drawer's address on the check or last known address; it does not require certified mail. Only the second demand, sent after the first 15-day period lapses, must go by certified mail, return receipt requested, to start the 30-day period before double damages apply.

• Civil Bad-Check Statute Is Separate From the Criminal Hot Check Law

  Arkansas's civil bad-check demand under Ark. Code Ann. Section 4-60-103 is a different statute from the state's criminal Hot Check Law, Section 5-37-301 et seq., which separately lets a payee send its own 10-day notice before referral for criminal prosecution. A civil demand letter should not be conflated with, or substituted for, that criminal notice.

• No ADTPA Pre-Suit Notice Requirement

  The private right of action under the Arkansas Deceptive Trade Practices Act, Ark. Code Ann. Section 4-88-113(f), requires only proof of an actual financial loss caused by reliance on an unlawful practice, with no notice or demand letter required before filing suit. A private plaintiff may recover actual financial loss, not multiplied damages, plus a discretionary award of reasonable attorney's fees.

• Discretionary Fee-Shifting, Not a Presentment Rule

  Ark. Code Ann. Section 16-22-308 lets the prevailing party recover a reasonable attorney's fee in an action on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, a contract for goods, services, or labor, or breach of contract. Unlike a formal presentment statute, the fee award is discretionary with the court and does not require presenting the claim before filing suit.

• Debt Collection Act Excludes First-Party Creditors

  Arkansas's Fair Debt Collection Practices Act, Ark. Code Ann. Section 17-24-502(5)(D)(i), excludes an officer or employee of a creditor collecting debts in the creditor's own name. A creditor is covered only if it uses a name suggesting a third party is collecting the debt, under Section 17-24-502(5)(B).

• Arrest and Imprisonment Threats Barred for Covered Collectors

  For a debt collector covered by Arkansas's Fair Debt Collection Practices Act, Ark. Code Ann. Section 17-24-506(b)(4) bars representing that nonpayment will lead to arrest, imprisonment, or seizure of property or wages, unless that action is lawful and the collector intends to take it. Never threaten arrest, jail, or prosecution to collect a civil debt regardless of whether the Act covers the sender.

• Statute of Limitations by Claim Type

  Arkansas gives 5 years to sue on a written obligation, Ark. Code Ann. Section 16-56-111(a), and 3 years to sue on an oral or unwritten contract, an open account, or for taking or injuring goods or chattels, Section 16-56-105(1), (3), (6). A partial payment or written acknowledgment of default tolls the 5-year period, Section 16-56-111(b).

• Small Claims Limit and No-Attorney Rule

  Arkansas's Small Claims Court, a division of the Arkansas District Court, hears disputes under $5,000, exclusive of interest and costs, under relaxed procedures and without attorneys; collection agencies and money lenders may not file there at all. A larger claim must be filed outside Small Claims Court instead.