A Letter of Demand is an effective method for recouping money owed to you by either a person or company, that you can do yourself without the need for a lawyer.
Unfortunately, many people experience at one time or another, someone or a company owing them money and not paying the money. When this happens, the first step to take is to send the person a letter in the form of a request or demand for the debt owed. This letter should outline how much money is owed and the consequences if the money remains unpaid, which is bringing a legal action against them.
This may serve as a final reminder to the debtor who owes money and in many situations threatened court action may be enough for them to pay the amount owed. Alternatively a letter may lead to them contacting you to work out payment arrangements.
When sending a letter of demand, copies of receipts and any contract or agreement with the debtor should be included as proof of the debt owed. It may be the case that for some reason documents were misplaced by the debtor and the letter with its proof attached, will be evidence of the transaction and debt owed.
Send your Letter of Demand registered mail
Another important aspect of sending a letter of demand is to do so by registered post. In doing this, you have record of the letter being sent and a debtor cannot claim that they did not receive it.
Not only does a letter of demand serve as a final reminder to a debtor, but, if you then do have to go to court to recover your money you can use a copy of the letter of demand as evidence showing your claim and proof that you have attempted a settlement with the debtor. Furthermore the receipt from the registered post will show the court that the debtor had knowledge of the debt and your attempt to settle it.
For these reasons, sending a letter of demand is quite important. If proceedings were commenced against a debtor without giving notice to the debtor, and without any attempts being made to settle, a court may not look favourably upon this and may even order you to attempt a settlement before the court makes a decision. Having a letter of demand and its receipt by the debtor is strong evidence to rebut a claim that a debtor simply did not know that they owed a debt.
We’ve written an extremely easy-to-use Letter of Demand template. There are online video instructions, that take you step-by-step through the template, plus answers to FAQs. Get the Legal123: