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Letters of Demand for Unpaid Debts

Recovering money owed by clients, customers or other businesses is time-consuming and stressful, and where reminders have stopped working, a formal letter of demand is usually the fastest and most cost-effective step available. 

Citilawyers drafts and issues letters of demand for creditors across Sydney and New South Wales. We act for businesses, sole traders and individuals recovering outstanding commercial debts.

If a debtor is ignoring your invoices, call (02) 9233 7737 for a free initial phone consultation.

What Is a Letter of Demand?

A letter of demand is a formal written demand from a creditor requiring a debtor to pay an outstanding debt within a specified timeframe, failing which legal action may be commenced.

It places the debtor on notice of the debt and of the creditor’s intention to pursue recovery. It may also include an undertaking for the debtor to sign, particularly where the parties have negotiated a repayment arrangement.

A letter of demand can also assist in demonstrating to a court or tribunal that you took reasonable steps to resolve the dispute before litigating, which may be relevant to any later determination of costs.

When to Instruct Us to Issue a Demand

Contact us about issuing a letter of demand where:

  • An invoice is overdue and follow-up requests have been ignored;
  • A customer has disputed an invoice without genuine grounds;
  • A debtor has stopped communicating or changed address;
  • You are owed money under a contract, supply agreement or business sale; or
  • Informal reminders have stopped working.

Where the relationship is worth preserving, it is often worth sending a reminder about the outstanding invoice first. Where that has not worked, a solicitor-drafted demand is the appropriate next step.

Why Instruct a Solicitor to Issue Your Demand

A letter of demand does not have to be prepared by a lawyer, and a creditor can issue one directly. Depending on the size and complexity of the debt, engaging a solicitor often saves time and cost by getting the letter right at the outset.

Instructing Citilawyers means:

  • Advice on your prospects of recovery and the steps required if the debtor does not pay;
  • A letter and undertaking tailored to your circumstances and drafted promptly;
  • A clear signal to the debtor about how seriously you regard the matter;
  • All relevant facts, particulars and supporting material included, so the demand is as effective as possible; and
  • Where appropriate, letter of demand templates tailored to your business for future use.

For the elements a demand needs and the drafting mistakes that stall payment, see our article on what to include in a letter of demand.

If the Debtor Does Not Pay

If the debtor disputes the debt, proposes an arrangement or does not respond, we handle the reply on your behalf. 

Where the debtor fails to respond or refuses to pay, court-assisted remedies are available. For the recovery pathway from proceedings through to enforcement, see our debt recovery lawyers page. Where the debtor is a company and the debt is $4,000 or more, a statutory demand may be the more effective tool, and our statutory demand lawyers page explains that process.

Where the debt has not yet fallen due and you want to protect future receivables, our cash flow improvement lawyers page covers credit applications, guarantees and security.

We assess every matter commercially before recommending escalation, including whether the amount justifies the cost of recovery and whether the debtor has assets to satisfy a judgment.

Areas We Assist

Our Sydney letter of demand lawyers act for creditors throughout Sydney and across New South Wales, including Parramatta, Chatswood, North Sydney, Liverpool, Penrith, Ryde, Bondi Junction, the Inner West, Sutherland Shire, Hornsby, Burwood, Bankstown, Manly and Newtown, as well as businesses throughout regional NSW.

Contact Our Letter of Demand Lawyers

If you are owed money and informal requests have not worked, contact Citilawyers. Have the invoices, the contract or supply terms, and any correspondence with the debtor ready when you call.

Call (02) 9233 7737 for a free initial phone consultation, or contact us today.

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    Recovering money owed by clients, customers or other businesses is time-consuming and stressful, and where reminders have stopped working, a formal letter of demand is usually the fastest and most cost-effective step available. 

    Citilawyers drafts and issues letters of demand for creditors across Sydney and New South Wales. We act for businesses, sole traders and individuals recovering outstanding commercial debts.

    If a debtor is ignoring your invoices, call (02) 9233 7737 for a free initial phone consultation.

    What Is a Letter of Demand?

    A letter of demand is a formal written demand from a creditor requiring a debtor to pay an outstanding debt within a specified timeframe, failing which legal action may be commenced.

    It places the debtor on notice of the debt and of the creditor’s intention to pursue recovery. It may also include an undertaking for the debtor to sign, particularly where the parties have negotiated a repayment arrangement.

    A letter of demand can also assist in demonstrating to a court or tribunal that you took reasonable steps to resolve the dispute before litigating, which may be relevant to any later determination of costs.

    When to Instruct Us to Issue a Demand

    Contact us about issuing a letter of demand where:

    • An invoice is overdue and follow-up requests have been ignored;
    • A customer has disputed an invoice without genuine grounds;
    • A debtor has stopped communicating or changed address;
    • You are owed money under a contract, supply agreement or business sale; or
    • Informal reminders have stopped working.

    Where the relationship is worth preserving, it is often worth sending a reminder about the outstanding invoice first. Where that has not worked, a solicitor-drafted demand is the appropriate next step.

    Why Instruct a Solicitor to Issue Your Demand

    A letter of demand does not have to be prepared by a lawyer, and a creditor can issue one directly. Depending on the size and complexity of the debt, engaging a solicitor often saves time and cost by getting the letter right at the outset.

    Instructing Citilawyers means:

    • Advice on your prospects of recovery and the steps required if the debtor does not pay;
    • A letter and undertaking tailored to your circumstances and drafted promptly;
    • A clear signal to the debtor about how seriously you regard the matter;
    • All relevant facts, particulars and supporting material included, so the demand is as effective as possible; and
    • Where appropriate, letter of demand templates tailored to your business for future use.

    For the elements a demand needs and the drafting mistakes that stall payment, see our article on what to include in a letter of demand.

    If the Debtor Does Not Pay

    If the debtor disputes the debt, proposes an arrangement or does not respond, we handle the reply on your behalf. 

    Where the debtor fails to respond or refuses to pay, court-assisted remedies are available. For the recovery pathway from proceedings through to enforcement, see our debt recovery lawyers page. Where the debtor is a company and the debt is $4,000 or more, a statutory demand may be the more effective tool, and our statutory demand lawyers page explains that process.

    Where the debt has not yet fallen due and you want to protect future receivables, our cash flow improvement lawyers page covers credit applications, guarantees and security.

    We assess every matter commercially before recommending escalation, including whether the amount justifies the cost of recovery and whether the debtor has assets to satisfy a judgment.

    Areas We Assist

    Our Sydney letter of demand lawyers act for creditors throughout Sydney and across New South Wales, including Parramatta, Chatswood, North Sydney, Liverpool, Penrith, Ryde, Bondi Junction, the Inner West, Sutherland Shire, Hornsby, Burwood, Bankstown, Manly and Newtown, as well as businesses throughout regional NSW.

    Contact Our Letter of Demand Lawyers

    If you are owed money and informal requests have not worked, contact Citilawyers. Have the invoices, the contract or supply terms, and any correspondence with the debtor ready when you call.

    Call (02) 9233 7737 for a free initial phone consultation, or contact us today.

    Frequently Asked Questions

    Do I need a solicitor to send a letter of demand?

    No. A creditor can issue one directly. A solicitor-drafted demand tends to carry more weight, signals that you are prepared to escalate, and reduces the risk of omitting something that matters to the strength of the claim.

    What does a letter of demand cost?

    It depends on the debt and the supporting material. We confirm the cost at the initial consultation so you can decide whether pursuing the debt is commercially worthwhile before committing to further steps.

    What happens if the debtor ignores the letter of demand?

    Court-assisted recovery becomes the next option. For company debtors owing $4,000 or more, a statutory demand may be more effective. We advise on which route suits the debtor’s behaviour and capacity to pay.

    Can you still act if the debtor disputes the debt?

    Yes. A genuine dispute changes the cost and timeframe of recovery significantly, so we assess the strength of the dispute early and advise whether negotiation or proceedings is the better path.

    Can a letter of demand be issued against a company?

    Yes. It should be addressed to the appropriate officer and sent to the company’s registered address. Where the debt is $4,000 or more, a statutory demand may also be available and is often the stronger option.