A letter of demand is a formal written request from a creditor asking a debtor to pay an outstanding debt. The document usually outlines the details of the debt, the steps that have been taken to recover it, and the actions that will be taken if the debt is not settled.
Laws regarding debt collection and letters of demand differ by jurisdiction, but there are general guidelines that businesses and individuals can follow to ensure their letters are effective and compliant with the law.
Before sending a letter of demand, be sure to:
Re: [Briefly state the nature of the dispute]
Dear [Recipient's Name],
This formal letter of demand is being sent due to [summarize the situation leading to this dispute in 1-2 sentences. E.g. outstanding payment for services rendered].
Per the terms of our [agreement/contract] dated [date], you owe [amount] for [unpaid invoices, breach of contract, services, etc. List relevant details like invoice numbers, contract sections, etc.]
I have made several attempts to resolve this issue in good faith, without resorting to formal action [list any relevant background details of attempts to resolve informally]. However, you have not fulfilled your obligations.
Accordingly, I demand that you remedy this situation by [payment of amount owed, action requested, etc.] within 14 days of receiving this letter.
If you do not comply with this demand, I reserve my right to pursue further legal action. I may file a claim in court or submit this matter to arbitration or mediation, seeking damages for your breach.
[You may include optional statements about actions you will pursue if they do not comply, such as:
- Commencing litigation and seeking recovery of my damages plus interest and legal costs.
- Placing a lien on your assets or property.
- Submitting reports to credit bureaus that negatively impact your credit rating.
- Exercising my rights under our agreement to withhold future services.]
I trust this will not be necessary and that you will fulfill your obligations after receiving this demand. Please contact me at [your phone number and/or email address] within the next 14 days so that we can resolve this matter.
[Your Full Name]
By using this letter of demand template, you take a step towards securing your receivables and maintaining a positive cash flow, all while staying within the bounds of the law.
Note: This article and the template provided are for informational purposes and should not be construed as legal advice. Always consult with a legal professional for issues requiring legal counsel.