What is a Letter of Demand?
A Letter of Demand is a formal request for payment of an outstanding debt.
Use this professional Letter of Demand template to collect money without paying a lawyer or debt collector.
It is normally sent after a person or business has failed to reply to your previous payment requests. The letter clearly states the amount owed, the date it was due and what you will do if you do not receive payment within a set timeframe.
Don’t let people get away with not paying you!
Who can use this template?
- Any business chasing an outstanding debt owed to them
- Anyone looking to try DIY debt collection (before taking further action).
- Anyone who wants to get paid faster
Why should I use this Letter of Demand template?
There are a few good reasons why you should try sending a Letter of Demand before commencing legal action:
1. You might be able to recover your debts for free before you spend money on a lawyer or debt collector
2. It gives people another opportunity to pay you
3. The warning can encourage debtors to pay their debts because they see you are serious
4. It provides written proof that you have tried to resolve the dispute fairly and have given them a chance to respond
What does a Letter of Demand include?
Our Letter of Demand template includes all of the key information you need:
- A clear demand for payment
- All relevant details for the debt (amount, due date, invoice #)
- A time limit before you take further action
- Your bank account details
- The next steps you will take (including legal action) if payment is not made
How do I write a Letter of Demand?
The first thing you need to do is confirm the name, address and contact details of the person or business that owes you money. You must address the letter to the right person/business. Also confirm the total amount outstanding, the due date and the goods/services you provided.
Double-check any invoices, contracts or correspondence relating to the debt. You should attach these as evidence when you send the Letter of Demand.
Once you have gathered all of the details, you’re ready to draft your letter using our template!
How do I send a Letter of Demand?
There are several ways you can send the letter, but the main thing is you need to make sure they receive it.
We recommend you send via Registered Post so you can get proof of delivery from Australia Post. You can also send via email with a Read Receipt, but this is not as reliable, and emails are easier to ignore than a letter.
The final option is a process service firm such as Polo CPI. They will attempt to ‘serve’ the letter to the recipient in person.