A letter of demand is a formal letter requesting payment or action from another person you are in dispute with. This should be considered the first step of any debt recovery action. These letters are beneficial because they provide an opportunity for early resolution. These letters can open up the communication between the parties and it is a genuine attempt to resolve the issues before going to court. Court proceedings can be costly, time consuming, and mentally exhausting! A letter of demand can reduce the expense of commencing proceedings.

• Outline the parties relationship;
• Outline the claim;
• The basis of the claim/support to your point;
• Request payment within a clear  time frame;
• Provide the steps as to how to resolve the issue including payment details and deadlines.

If you have received a letter of demand, it is not in your best interests to ignore the communications. If the matter progresses to Court, you will need to explain to the Judge why you did not respond to the good faith effort to come to an amicable resolution. If you have sent a letter of demand and the other party does not respond, it is then appropriate to take the next steps to pursue the recovery of that debt.

Make sure the Letter of Demand is addressed to the correct recipient.  Sometimes the debtor is not necessarily the person you have been communicating with.  Or sometimes the person you have been communicating with is not necessarily the debtor.

The Letter should be precise, polite and respectful. You should formally notify the debtor of all the issues which are unresolved, in the most concise way. It should include accurate information and attach all copies or relevant supporting documentation.

A Letter of Demand cannot be threatening, make unsubstantiated claims or accusations. It cannot be misleading or contain statements that grossly exceed the legitimate assertion of the claimant’s rights.

The first step is to consider if you are willing to negotiate and consider their response in full. Wakefields Lawyers can assist in considering the merits of any counter argument against your claim. The process that needs to follow depends on each individual’s circumstance.   It might be appropriate to address the counter argument, negotiate or take formal action.

At Wakefields Lawyers we can assist with assessing your debt recovery matter and advising you on any debt recovery action. We can also assist if you have received a letter of demand and if you are not sure what to do. Get in contact with a member of our litigation team to receive tailored advice.

• Elizabeth Hughes (Senior Solicitor)

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