There are many advantages of issuing a letter of demand to a client who has failed to make payment for your services. A letter of demand sends the debtor a direct indication that the non-payment for the service is becoming a dispute.

Anyone can issue a letter of demand. However, the chances are that you have already tried to contact the debtor regarding the outstanding payment. A letter of demand is authoritative and will likely send the other party a message that there are legal ramifications likely to be involved.

Legal ramifications will usually motivate the person to make payment, or seek a payment plan, as a letter from a lawyer carries weight.

The letter will usually set out the full details of the debt; the terms of the contract including interest clauses, and default clauses; notice that unless the debt is paid in full within a certain period of time court action will be initiated to recover the debt without further notice to the debtor; and payment details.

A letter of demand is a cost-friendlier option than initiating legal proceedings. Legal proceedings can be lengthy and require a much more thorough approach to the dispute.

Further, if the debtor fails to make payment, and court proceedings are initiated, the letter can be relied on as evidence that a formal demand was made and that the person was given opportunities to arrange payment. 

A letter of demand is also a less hostile approach to legal proceedings. This may encourage the other party to respond in a formal manner, and initiate a course of negotiations that are easier and less costly than legal proceedings.

If the debtor fails to pay their debts after a letter of demand has been sent, you may apply to the Court for a Summary Judgment. This process is relatively quick and allows quick action to be taken against the debtor.

Debt recovery can be a long and stressful process, but there are methods in place to make this process easier for you. If you are confused about how to recover a debt, it pays to seek advice from a professional with experience in the area.


Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Alan Knowsley and Hunter Flanagan-Connors