Australian Legal Templates
Letters of Demand
Letters of Demand
The first step in recovering a debt is a well worded letter of demand. It is helpful to recommend a client issue a demand of their own. This puts the debtor on notice that they are seriously overdue and foreshadows the matter being passed to a solicitor. After the client’s demand a formal letter of demand should come from the solicitor’s office.
Initial letters of demand should be polite so that a commercial relationship can be preserved if the non payment is merely an oversight. The intention is to let the recipient know the matter is now in the hands of a lawyer but says this in a polite way. It also increases the likelihood of payment if the initial demand is polite. Rude and overly threatening demands from the outset may have the effect of inducing a debtor to withhold payment out of spite.
In many cases a letter of demand indicating the matter has been passed to solicitors is sufficient
to induce a client to pay. In other cases more threatening letters are required. If these fail, then obtaining judgment via the court process and enforcement are required.
We have three letters of demand.
Letter of Demand 1
An initial letter of demand that is polite and assumes there may have been an oversight in not paying. Allows 7 days for payment.
Letter of Demand 2
A more threatening letter that mentions legal proceedings and gives 7 days to pay.
Letter of Demand 3
Gives a further 7 days to pay before proceedings are commenced. Outline costs of proceedings and that these may be added to the debt.
Also included FREE
An updated checklist includes points on what to cover before granting credit to determine if the client is creditworthy or if the debt is recoverable. These will assist in advising clients and will serve as a reminder to the practitioner on what to look out for when assessing the credit worthyness of new clients (and reassessing existing clients)
The Debt Recovery bundle download includes three letters of demand and a Statement of Claim so you can take the matter to court if the debt is not paid. Included in the download:
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