Free letter of demand template

What goes in a letter of demand?

Five things: who owes what, what the debt is for, the exact amount, a date to pay by, and what happens if they miss it. Anything else is padding.

Use full legal names, not trading names. The entity you name is the entity you would have to sue. Give a date rather than "within 7 days", so there is nothing to argue about later. And only threaten what you will actually do — a bluff that gets called makes every letter after it worthless.

How long should you give them to pay?

Seven days for most debts. That is what this tool uses. Shorter looks unreasonable if a court ever reads it; much longer and the letter loses its edge.

Strata levies are the exception. In New South Wales an owners corporation has to give at least 30 days' notice before starting recovery action, under section 86 of the Strata Schemes Management Act 2015. Pick "Strata levies" above and the deadline moves to 30 days.

Do you need a lawyer to send one?

No. Anyone can write to someone who owes them money, in any state. Chasing a debt owed to you is you acting on your own behalf, and that needs no licence anywhere in Australia.

Who signs it still matters, though. A demand from the person who has already sent three invoices reads like the fourth invoice. That is the reason a paid option exists, not a legal requirement.

When is a letter of demand the wrong move?

Six cases where sending one wastes time you do not have:

• They are already in liquidation, administration or bankruptcy. A demand does nothing once an insolvency practitioner is appointed. Lodge a proof of debt instead.
• You already have a judgment. You need enforcement — a writ, a garnishee order, an examination. Not another demand.
• The debt is out of time. Most contract debts stop being enforceable after six years. Check the limitation period first.
• They are overseas with nothing in Australia. There is no local court to escalate to.
• They genuinely dispute it — defective work, goods that never arrived. A demand will not settle a factual dispute.
• The debt is under about $150. Your time costs more than the money.

One more, about us rather than you: we can only send letters on your behalf where the debtor is in NSW, Victoria, Queensland or the ACT. Doing it for someone else in WA, SA, Tasmania or the NT needs a licence we do not hold. The free letter works in all eight.

Should you send it yourself, or have us send it?

A letter you send yourself works in a small number of cases — usually where the debtor simply forgot and one firm reminder is enough.

For most debts it is not enough. If you have already asked and been ignored, another message from you changes nothing. What changes things is the debt leaving your hands: a demand on our letterhead, written and approved by a NSW solicitor, delivered and tracked, followed up on a schedule, and handed to a partner law firm on day 14 if it is still unpaid.

Use the free letter to put it in writing. If that does not work, you need more than a letter.