Free letter of demand for money you lent

Can you recover a loan with nothing in writing?

Often yes — but the letter has to do more work. An oral loan is still a contract in Australia. The problem is proof: with no loan agreement, you are relying on the transfer record, any messages about repayment, and whether the other side ever acknowledged the debt. That is why this letter sets out when the money was advanced, how much, and what was agreed about repayment in plain terms. It becomes part of the evidence.

The most useful thing a demand does here is force an answer. If they reply admitting the debt — even to ask for more time — that acknowledgement is powerful, and in most states a written acknowledgement or a part payment restarts the six-year limitation period from the date it is given. A reply that concedes the loan is often worth more than the letter itself.

The clock is the thing to check before you send. Most Australian contract debts become unenforceable six years after the cause of action arose, and for an on-demand loan that generally runs from when repayment was demanded, not when the money was lent. If it has been years, check the limitation period before spending more effort.

Do you need a lawyer to send one?

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

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

When is this the wrong move?

• It was a gift, or was ambiguous at the time. If you cannot say plainly that repayment was expected, a demand invites a denial you cannot answer.
• You lent it in the course of a credit business. Consumer credit is regulated under the nccp act and has its own rules.
• The relationship matters more than the money. A formal demand to family is hard to walk back.
• The debt is outside the limitation period. Most Australian contract debts stop being enforceable after six years. Check the limitation period first.
• They are already in liquidation, administration or bankruptcy. A demand does nothing once an insolvency practitioner is appointed.

And one 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 above 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 other side 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.

What other letters can you build here?

Every one of these is the same tool, set up for a different debt. All free, all downloadable as Word or PDF.

• Unpaid invoices — the general business version, and the place to start if none of the others fit
• Unpaid wages — what law is on your side when wages go unpaid
• Rent arrears — does a rent demand go to a court or a tribunal
• Strata levies — why does this letter give 30 days when the others give 7
• Unpaid fees — does your engagement letter change what you can demand