Practice Areas / Letter of Demand
Letter of Demand Lawyers
Formal letters of demand for unpaid invoices, loans and broken agreements, prepared from your documents and sent on our letterhead. For businesses and individuals across Victoria, from our Frankston office.
Getting paid before it reaches court
When someone owes you money and has stopped answering, a letter of demand from a lawyer is often what gets it paid. It tells them exactly what is owed and why, gives them a deadline, and makes clear what you will do if they let it pass. Many debts are settled at this point, before any claim is filed and before either side spends money on court.
We prepare letters of demand for businesses, contractors, landlords and individuals. Radek Dajer reads the contract, invoices and correspondence behind each claim before the letter goes out, and can take your instructions in Polish.
For a fixed-fee letter of demand sent online, and guides to writing your own, see our dedicated site, Letters of Demand.
Letters of demand we prepare
What goes into a letter of demand
A letter of demand works when the person reading it can see that you are right and that you are organised. Ours set out:
- who is owed and who owes the money, using the correct legal names (a company, a sole trader or the trustee of a trust);
- the amount, how it is made up, and any interest your contract allows;
- the contract, quote, invoice or agreement the debt comes from;
- a deadline for payment, usually 14 days;
- how to pay; and
- what you intend to do if the debt is not paid.
The letter has to be accurate. A demand for the wrong amount, against the wrong party, or threatening a step you do not intend to take gives the other side something to argue about and can weaken your position later.
Getting the timing right
Send the letter once the debt is due and your own reminders have gone unanswered. Waiting rarely helps: a business short of cash tends to pay the creditors who press first.
A claim for a debt under a contract must generally be started within six years from when the debt fell due (Limitation of Actions Act 1958 (Vic) s 5(1)(a)). A letter of demand does not stop that time running. Time starts again only if the debtor acknowledges the debt in a signed document or makes a part payment (ss 24(3), 25).
After we send the letter
Most debtors respond in one of four ways, and we deal with each of them for you.
- They pay: we confirm the payment with you and close the file.
- They offer instalments: we put the arrangement in writing, so that if a payment is missed you can act on it without starting again.
- They dispute the debt: we look at what they say, tell you whether it has any substance, and advise on the next step.
- They do not respond: we advise on the options and what each would cost. These include a claim in the Magistrates’ Court, which hears claims up to $100,000; a statutory demand, if the debtor is a company and the debt is not genuinely disputed; or a bankruptcy notice, if the debtor is an individual and you already have a judgment. Our Debt Recovery page explains each step.
Keeping the demand lawful
A demand can be firm without crossing a line. Overstating the debt, threatening action you have no intention of taking, or pressing the debtor in a way that amounts to harassment can expose you to a complaint or a claim.
When the debtor is an individual consumer, the debt collection guideline published by the ACCC and ASIC (Regulatory Guide 96, April 2021) sets out what regulators expect of creditors. We keep every letter within those limits.
Not about money? Cease and desist letters
Some demands are about conduct rather than money: stop using our trade mark, take down that post, stop approaching our clients. We prepare these letters too. See our Defamation and Intellectual Property and Trade Marks pages.
Received a letter of demand?
Do not put it aside. Work out whether the amount is right and whether you have any answer to the claim, and get advice before the deadline passes. A letter of demand is not a court order: a court can only order you to pay after a claim has been filed and decided. Ignoring the letter, though, usually means the next thing you receive is a claim, with costs added.
Owe the money but need time? An agreed payment plan, put in writing, usually costs both sides less than a court claim, and we can put one forward for you.
Fixed fee: from $440 including GST
That is $400 plus GST for a standard letter of demand to one debtor. Where a letter needs more work, for example many documents or a debt that is already disputed, we quote before starting.
The fee covers:
- reading your contract, invoices and correspondence;
- checking the debtor’s correct legal name with a company or business name search;
- preparing the letter and sending it by email and post within two business days of receiving your documents;
- one follow-up with the debtor; and
- passing on their reply, with our view of it.
We charge no commission on what you recover. If the debt is disputed or the matter goes further, we quote for the next step before doing any work, and amounts paid to third parties, such as court fees, are shown separately.
Owed money? Send us the details
Tell us who owes the money, how much and what it is for. We will tell you whether a letter of demand is the right first step and what documents we need, and confirm the fee before we start.
We reply to every enquiry within one business day, by phone, email or text, whichever you prefer.
What happens next
- Send the form.
- We reply within one business day.
- We ask for the documents we need, confirm the fee and send the letter.
Prefer to talk? Call 1800 776 529.
Common questions
Can’t see your question? Call 1800 776 529 or send us a message.
No. You can write one yourself. A lawyer’s letter is usually taken more seriously, and it is checked for the mistakes that cause trouble later, such as demanding the wrong amount or naming the wrong party.
There is no fixed legal minimum. We usually allow 14 days, or the period your contract sets if it has one.
Yes, if your contract or terms of trade provide for interest on late payments. If they do not, interest is usually a matter for the court once a claim is filed.
Usually only if your contract or terms of trade allow you to recover collection costs. If you later sue and win, the court decides what costs the other side pays.
If the debt is due, is at least $4,000 and is not genuinely disputed, a statutory demand may be quicker than a court claim. Our Debt Recovery page explains how it works and when it is the wrong choice.
Insights on debts and disputes
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When a debtor fails to pay, knowing the correct legal steps can mean the difference between recovering your money and writing off the debt entirely.