What you'll do
- Understand what a letter of demand is meant to do
- Include the details that make a demand effective
- Keep the tone firm, clear and professional
- Set a reasonable deadline and a clear next step
- Know what to do if the demand is ignored
8 min
What a letter of demand does
A letter of demand is a formal written request for payment. Sent before any escalation, it shows you are serious and gives the debtor a final, clear chance to pay. Many overdue accounts are settled at this stage. This guide is general business information and not legal advice; for a complex or disputed matter, consider getting advice.
Write and send it
- Address it to the correct legal entity and a named person.
- State the amount owed and the invoices it relates to.
- Briefly explain why the money is due, referencing the agreement.
- Set a clear deadline to pay, such as within 7 or 14 days.
- Explain what will happen if payment is not made by then.
- Keep the tone professional and free of threats or insults.
- Send it in a way you can prove, such as email plus post, and keep a copy.
A calm, specific letter is far more persuasive than an angry one.
If it is ignored
If the deadline passes with no payment or contact, it is usually time to escalate. You can hand the matter to Merion to recover, with no upfront cost, by referring at merion.com.au/refer-a-debt. Your letter of demand and proof of sending become useful parts of the file. Use the Merion tools to confirm the exact balance, including any interest.
Good to know
- A clear, professional letter of demand often prompts payment alone
- Always set a specific deadline and a clear consequence
- Keep proof of sending so the letter strengthens any later action
FAQ
How long should I give the debtor to pay?
A common window is 7 to 14 days. Make the deadline clear and reasonable, and state what happens if it passes.
Should the letter threaten legal action?
Keep it factual and professional. State the next step plainly without insults or threats. For wording on legal steps, seek advice.
What if the debtor still does not pay?
Escalate. Referring the matter to Merion costs nothing upfront, and your letter of demand becomes part of the supporting file.
Still not sure? Our team is happy to talk it through.