If someone owes you a debt and you have exhausted all your efforts to recover the funds, we would highly recommend for a formal letter of demand to the sent to them.
What is a letter of demand?
A letter of demand for payment of debt is a formal letter which provides the debtor with one final chance of taking action and conveys the seriousness of which the matter is being treated. It generally includes the following: –
- The debt amount owed;
- Why the debt amount is owed (e.g. pursuant to the contractual obligations between the parties such as an exchange of a service for a fee);
- How the amount is calculated;
- Details of your attempts made to collect the debt;
- A time limitation on when the payment should be received (e.g. 7 to 14 days of the date of the letter); and,
- A formal notice should no response or payment be received (e.g. legal proceedings to be commenced).
Whilst you do not need a lawyer to write a letter of demand, the greatest advantage of retaining a lawyer is that the letter will be on a law firm’s letterhead. This in itself will indicate to the debtor that you are treating this matter seriously, and the debtor will then more likely attend to the payment.
If you require any further assistance in recovering a debt, please do not hesitate to contact our office on 02 8917 8700.