A letter of demand is a formal written notice that a debt is due and that you intend to act if it is not paid. It is the step between asking and going to court, and it resolves a great many matters on its own.
What it is for
Two things. It gives the other side an unambiguous, dated opportunity to pay before anything formal happens — which is a step a court will expect to see. And it changes the register of the conversation, which is frequently enough on its own.
A debtor who has been ignoring emails from a supplier often responds to a letter that sets out a deadline and a consequence, because it is the first indication that this is not going to be dropped.
What it should contain
- Who owes what to whom — full legal names of both parties, not trading names.
- The amount, and what it is for.
- The basis: the agreement, the invoice numbers, the dates.
- That the amount is due and unpaid.
- A deadline to pay — commonly seven to fourteen days.
- What happens if it is not met.
- How to pay.
Factual, dated, unemotional. A letter that argues or accuses is weaker than one that simply states.
Do you need an attorney?
Not necessarily. You can send one yourself, and for smaller amounts many businesses do.
A letter on an attorney's letterhead carries more weight, and some debtors respond only to that. The cost is usually modest for a straightforward demand, and it can be worth it purely for the effect. Where the amount is substantial or the matter is complicated, take advice anyway — the letter should not commit you to a position you have not thought through.
Send it so you can prove it arrived
Email with a delivery record, and to the registered address as well where the amount justifies it. Keep the proof. "We never received it" is the first response to an ignored demand, and it is much weaker against a delivery record.
Then do what you said
This is the part that matters most. A deadline that passes without consequence teaches the debtor — and anyone they talk to — that your deadlines are not real.
If you said you would escalate, escalate, or make a deliberate decision not to and communicate a new position. Do not simply let it drift, because the next letter you send to anyone carries less weight for it.
Be ready to settle
Most demands end in a payment arrangement rather than a lump sum, and that is a good outcome. Put any arrangement in writing, with dates and amounts, and state what happens if an instalment is missed.
General guidance, not legal advice. Where an amount is significant, or a claim may prescribe, take proper advice — legal claims do expire.