What you'll do
- Understand what a letter of demand is and is not
- Identify the key details it contains
- Know that it comes before, not after, legal action
- Follow the steps to respond properly
- Recognise when to seek advice
5 min
What it is
A letter of demand is a formal written request for payment of an amount recorded as outstanding. Importantly, it comes before any escalation — receiving one does not mean legal action has been taken.
How to respond to it
Treat a letter of demand as a clear prompt to act, and work through these steps.
- Read it carefully. Note the original creditor, the amount, the reference number and any date by which to respond.
- Decide your response. Pay, propose a plan, ask a question, or dispute the amount.
- Reply before the date. Respond by any stated date to keep your options open.
- Put it in writing. A written reply quoting your reference number creates a clear record.
- Keep a copy. Save the letter and your response together.
If you are unsure
If you are not sure what the letter means for you, ask us — or seek free advice from the National Debt Helpline on 1800 007 007. You can also contact us directly to talk it through.
Good to know
- A letter of demand is a formal request, not legal action itself
- It comes before escalation, so responding now keeps options open
- Reply in writing and quote your reference number
FAQ
Does a letter of demand mean I am being sued?
No. It is a formal request for payment that comes before any legal step. Responding to it is how you avoid escalation.
What should I do first?
Read it carefully, note any response date, and decide whether to pay, propose a plan, ask a question, or dispute the amount.
What if I cannot meet the amount?
Respond and propose a payment arrangement. We review every reasonable proposal fairly and prefer a workable plan to escalation.
Still not sure? Our team is happy to talk it through.