A letter of demand is the cheapest step in any debt dispute and the one most often got wrong. We draft letters that make paying the easiest thing the other side can do - and that hold up if it is not.
Tell us who owes what and how long it has been outstanding. It takes about a minute, and it decides whether a letter is enough on its own.
We will come back to you with whether a letter of demand is the right next step and what it needs to say. No obligation, and no cost for the first conversation.
A letter of demand is a formal written notice that sets out the debt, the legal basis for it, and a date by which it has to be paid. It is not a court document and it creates no new obligation. What it does is put the other side on notice, in writing, that you are treating the matter as a legal one.
Most debts end here. A demand that is specific, correctly addressed and credible is frequently enough on its own, which is why it is worth getting right rather than getting out quickly.
The mistake almost everyone makes is thinking of it as a letter. It is the first pleading.
Everything you put in it becomes evidence. If the matter goes to court, your demand is the first thing annexed to the claim, and it is the first thing the other side's lawyer reads looking for the gap. An amount you cannot substantiate, a date that contradicts your own invoice, a threat you were never going to carry out: each one is a free gift to the person who owes you money.
That is also why the free template is a bigger risk than it looks. The template is not wrong. It is blank, and every blank in it is a decision that a court will later read back to you.
If your debt is straightforward, small, and the other side has never disputed it, a template letter you write yourself is often the right call. The Queensland Small Business Commissioner publishes one and it is free. This page is about the debts where that is not the right call, and about the things that make the difference either way. Their template is here.
Five parts, in the order they appear. The list is not the hard bit. The judgement inside each item is.
Your full legal name and theirs, with the ABN or ACN. This is the part people get wrong most often and notice last. A trading name is not a legal entity, so a demand addressed to one is addressed to nobody, and a judgment in that name is unenforceable. If the debtor is a company, a current company search costs a few dollars and settles it.
What was agreed, what you did, and what makes the money payable: a contract term, an invoice accepted without objection, an account stated, or a statutory entitlement. Say which. A demand that asserts an amount without saying why it is owed reads as an opinion, and an opinion is easy to ignore.
The principal, itemised by invoice number and date. Then interest, but only if a contract term or a statute actually entitles you to it. Recovery costs, but only the ones you can genuinely recover. Every dollar you add without a basis is a dollar the other side can point at to argue the whole demand is inflated.
A calendar date, not a number of days, and generally 7 to 14 days from the letter. Then the consequence, stated plainly and limited to what you are actually prepared to do. A deadline with no consequence is a reminder. A consequence you will not act on is worse than none, because the next letter you send has already been discounted.
Bank details, a reference, and the address for payment. Make paying frictionless. Then invite a response: if they dispute the debt, you want that in writing and you want it now, because a dispute raised early can be dealt with cheaply and a dispute raised on the courthouse steps cannot.
None of that is secret. It is on the Queensland Government's template and on every competitor's blog. The work is not knowing the list, it is the judgement inside each item: which entity, which basis, which number, which consequence, and which of them you can stand behind.
These are not stylistic. Each one is a line in a letter that a defendant's solicitor reads back to you later, and every one of them is avoidable before the letter goes out.
Six of those seven cost you nothing to avoid. The seventh costs you the debt entirely, and it is the one nobody checks until it is too late. The Limitation of Actions Act 1974 is the one to read if your debt is getting old, and the ACCC and ASIC debt collection guideline is the one behind the fourth and sixth.
All three are legitimate. Which one is right depends on the size of the debt, whether it is disputed, and what you are prepared to do if the deadline passes.
We will tell you which of the three we think you need, including when that answer is the first one. A demand we would not have sent is not worth the fee. The middle route is our DIY Templates shop, and where the debt is a progress claim under a construction contract, read the building and construction page first: the BIF Act timeframes apply before any of this does, and they are shorter than you think.
A demand that did not get paid has not failed. It has done four things that change what the next step costs and how likely it is to work.
Before anything is filed, the question is whether the debtor can pay at all. There is no point buying a judgment against someone with nothing to enforce against, and that assessment costs far less than the proceedings it sometimes prevents.
From there the forum depends on the amount and the enforcement options depend on the debtor. Our debt recovery page sets out that path in full, including the thresholds and what QCAT expects you to have done first.
Imagine the relief of finally knowing your legal troubles are in expert hands. Whether it's recovering money owed through our Letter of Demand or pursuing your rights through legal proceedings, you'll leave our consultation with certainty about your path forward and the confidence that comes from having expert litigation lawyers protecting your interests.
Four questions, about a minute. It tells us whether a letter of demand is the right next step for your debt and what it would need to say - and if it is not the right step, we will say that too.
If the debt is close to six years old, start here before you send anything. Or call (07) 5370 8759 if you would rather talk it through first.
If the debtor is a company and the debt is not disputed, say so in the assessment, because that changes which step comes next.
Yes. There is no requirement that a letter of demand come from a solicitor, and for a small, recent, undisputed debt writing it yourself is often the sensible choice. The Queensland Small Business Commissioner and business.gov.au both publish free templates.
The reason people instruct a lawyer is not that the letter is hard to write. It is that a letter on a law firm's letterhead signals that the next step is real, and that someone has checked the entity, the entitlement and the numbers before the letter went out.
That depends on how much work the letter needs. A single demand on a clear unpaid invoice is a much smaller job than a demand on a disputed construction payment where the contract has to be read first.
We will tell you the cost in writing before any work begins, so you can weigh it against what you are chasing. On a small debt we will also tell you if we think the fee is more than the leverage is worth.
Most debts that are going to be paid are paid at this stage, which is why it is the first step rather than the last. A demand works when the debtor can pay and has simply been deprioritising you.
It does not work when the debtor cannot pay, or when there is a genuine dispute about the debt. Neither of those is a failure of the letter. Both are information you needed before spending money on proceedings, and that is part of what the letter buys you.
Generally 7 to 14 days from the date of the letter, expressed as a calendar date rather than a number of days so there is nothing to argue about.
Shorter can be appropriate where there is a real urgency, and longer where the amount is substantial or the debtor needs to get instructions. What matters more than the length is that the date is specific and that you act when it passes.
Yes, and in practice most are sent by email as well as by post. What matters is that you can prove it was sent and, ideally, received.
Send it to an address the other party actually uses, keep the sent item, and where the debtor is a company consider also posting it to the registered office shown on the ASIC record. If the matter escalates, service becomes a question someone will ask.
No. It is not a court order and it creates no new obligation. It asserts an obligation that already exists and gives the other side a chance to meet it.
That does not make it unimportant. It is usually the first document annexed to a claim, and what it says is treated as your position on the debt from the date you sent it.
The first thing to do is not to send another one. Work out whether the debtor can actually pay, because there is no point spending money to get a judgment against someone with nothing to enforce against.
From there the options are a further formal step, negotiation, or proceedings in the forum that matches the amount. Our debt recovery page sets out that path in full.
That is a useful outcome, even though it does not feel like one. A dispute raised in writing early can be assessed, answered, and often resolved for a fraction of what the same dispute costs when it surfaces after proceedings have started.
It also changes your options. Where the debtor is a company, a debt that is genuinely disputed will not support a statutory demand, so knowing about the dispute now prevents an expensive wrong turn later.
For most simple contract debts the Limitation of Actions Act 1974 gives you six years from the date the cause of action arose, which is usually when payment fell due.
Sending letters of demand does not extend that period. Neither does a promise to pay, unless it meets specific requirements. If your debt is approaching six years old, the time to get advice is now rather than after the anniversary.
Interest, yes, if a term of your contract provides for it or a statute gives you an entitlement. Without one of those, interest claimed in a demand is simply an overstatement of the debt.
Costs are more limited than people expect. You can recover some costs if the matter proceeds and you succeed, but demanding your legal fees as part of the debt itself is usually wrong, and it makes the whole figure look inflated.
It can, and that is worth weighing honestly, particularly with a customer or supplier you want to keep. A demand is a formal step and it will be read as one.
In our experience the relationship is usually already damaged by the time someone is considering a demand. A measured, accurate letter that sets out the position and invites a response does less harm than months of chasing, and it frequently produces a conversation rather than a fight.
