INITIAL LETTER OF DEMAND

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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.

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.

 

Includes GST

 

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INITIAL LETTER OF DEMAND
What is an initial Letter of Demand

Debt recovery letters, also known as collection letters or demand letters, are written communications sent by creditors or collection agencies to debtors to remind them of their outstanding debts and request payment. These letters are part of the debt collection process and serve to notify the debtor of their overdue account, encourage them to settle the debt, and outline the consequences of non-payment.

Types of Debt Recovery Letters

  1. Initial Reminder Letter: This is the first letter sent to the debtor, serving as a gentle reminder that a payment is overdue. It typically includes:

    • A summary of the debt, including the amount owed and the due date.
    • A request for immediate payment or to contact the creditor to discuss payment options.
    • A polite tone to maintain a good relationship.
Key Components to a Letter of Demand

Key Components of a Debt Recovery Letter

  1. Creditor Information: Name, address, and contact details of the creditor or collection agency.

  2. Debtor Information: Name and address of the debtor.

  3. Account Details: Information about the debt, including account number, amount owed, and the original due date.

  4. Payment Instructions: Clear instructions on how the debtor can make a payment, including acceptable payment methods and contact information for any questions.

  5. Consequences of Non-Payment: A statement outlining the potential consequences if the debt is not paid, such as late fees, interest charges, legal action, or damage to credit score.

  6. Request for Payment: A polite but firm request for immediate payment or to contact the creditor to arrange a payment plan.

  7. Deadlines: Specific deadlines for payment to avoid further action.

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