Demand Letter for Payment

Demand Letter for Payment

A Demand Letter for Payment refers to a written and formal document that explains ways of settling a date before the matter is taken to court for an open dispute. The purpose of this letter is to notify the company or person with your debt about your intentions to take legal actions against them by a specific date if they don’t heed your warning. It also describes the manner in which the debt should be repaid. Therefore, this letter is basically the first non-confrontational strategy to take when trying to recover your debt.

Ideally, the purpose of this letter is to have the person or company with your debt to settle or clear your debt or else be leave you no option but to go to court. The details that must be included in the Demand Letter for Payment include;

  • Details of the debt
  • The date when this debt was incurred
  • The expectations for payment
  • The penalties for not paying back the debt

If the party ignores this letter, the matter will proceed to a Small Claims Court; a body mandated to collect your due debt.

Demand Letter for Payment (Templates & Examples)

Demand Letter for Payment #01

Demand Letter for Payment #02

Car Collision Demand Letter Example


Demand for Payment

Final Demand Letter

Letter of demand Template


outstanding payment

Reasons for a Demand Letter


Sample Demand Letter for Payment

Three Days Rent Demand Notice

Unpaid Invoices amounting

    When Is A Demand For Payment Letter Needed?

    You should use the demand for payment letter when requesting payment from an individual who owes you money. While writing this letter, you need to approach each of the scenarios differently as they’re fact-specific. For instance, you shouldn’t demand payment for your contracting services right after completing a project but need to instead wait for the payment as per the date stated in your agreement. You also should get a refund if you had to provide a product by yourself or a specific service wasn’t offered. It would be best not to write a demand for payment letter if you can easily resolve the issue through a phone call.

    Writing this letter becomes necessary when you have already reached out to the company and brought your situation to their attention for fixing yet to no avail. If you don’t get your payment on time as agreed, then go ahead and write the demand for payment letter. You also need to write this letter if the company denies paying you despite believing you deserve payment. In general, the demand for payment letter should only be written whenever there’s a debt owed to you and deserve payment.

    When writing the letter, use a polite tone, clearly state your expectations, and stick to your facts. This is vital as this document will be used in court, and the last thing you want is to sound disrespectful or irrational.

    The Consequences of Not Using a Demand Letter

    You risk several consequences for ignoring to use the demand for payment letter. The first and obvious outcome is that you won’t get paid. The person who’s owing you might simply have forgotten about your debt. After all, people have a lot going on in their personal lives. They may think that they had cleared your debt, while this isn’t the case. Therefore, if you fail to send your demand letter, then you’ll be letting your money go unsettled.

    Without proof of writing this letter, you also won’t be in a file a lawsuit. This is because you’re expected to produce this letter when first filing a lawsuit to prove that this claim is no doubt legit and factual. Thanks to this letter, you lower the work you’ll need to do as all the required information is available in writing.

    How to Send a Demand Letter for Payment

    When sending the demand for payment, you need to collect all the evidence of money owed. After that, proceed to write this letter ideally by typing it and then send it through Certified Mail with the Return Receipt. Doing this is crucial as it’s enough proof that your debtor, without a doubt, received the letter.

    Step 1: Collect The Debt’s Evidence

    The gathering of evidence is necessary as it helps prove beyond reasonable doubt that the debtor owes you money. This applies regardless of whether it’s by receipt of goods sold, a signed contract, provided service, or any other relevant evidence.

    Step 2: Write The Demand Letter

    As you write the demand for payment letter, you need to think of a viable strategy in advance. It’s this incentive or threat which will be the prompt the debtor to pay. Some of the excellent ways of getting the debtor to pay you to include;

    • Collection’s Agency: People usually don’t like affecting their credit rating as this affects their ability to get loans in the future. Therefore, threatening to take the matter to a collection’s agency is enough motivator to have the debtor respond t
    • Discount: This entails giving a discount if the debtor pays the debt by a specified date. Typically, this discount will be up to 50% to entice the debtor to clear the debt.
    • Installment Payments: This involves giving the debtor a suitable repayment plan and is more suited to persons who depend on their paycheck solely.
    • Small Claims: Informing your debtor, you’ll take this issue to the Small Claims Court will undoubtedly make them uncomfortable. This is because their property might be placed a lien if the judgment goes against them.

    Step 3: Send In The Mail

    As you send the demand letter via mail, it’s recommended you use Certified Mail offered by the United States Postal Service with a Return Receipt. The phrase “certified mail” is a United States Postal Service’s (USPS) trademark, and it shows they’re mandated with the sender to notify the debtor about the money they owe you. There also is the option “return receipt,” which is a log you’ll get as the sender notifying you on who accepted the letter and the date it was it was delivered. This return receipt might come in handy in court to show that the debtor did get enough notice before you filled your case against them.

    Step 4: Start Legal Proceedings

    If the debtor fails to respond, you’re left with no option to hire a different party to try and collect your debt or to take legal actions against them. The options available for you to take are;

    • Going to the Small Claims Court: This is the cheapest route when seeking an amount that is less than the state’s mandated maximum amount. You don’t need a lawyer, and these cases are hastened and often complete within 30 days.
    • Forwarding this debt to the Collection’s Agency: Perfect option if you have lots of debtors as the cost of filing legal proceedings and hiring a lawyer, might offset accrual reward.
    • Heading to the District or Superior Court: Required when demanding for payment exceeding your State’s Small Claims Court. You’ll need a lawyer and get legal advice.

    Do I need to have a demand for payment notarized?

    No, you don’t have to notarize the demand for payment letter. Nonetheless, you must swear to the validity of the allegations when filing a claim in the court of law as you state your case’s facts. After that, you’ll need to restrict your demand for payment only to the facts as is the case with the affidavit. Doing this might lead to your demand eventually being taken as evidence in the court of law.

    What if you have no written contract but only a verbal agreement?

    The court acknowledges verbal agreements, so long as the “statute of frauds” isn’t applicable to that specific transaction. With that said, proving oral agreements can be challenging. In such cases, the court takes the transactions and performance that led to the disagreement and award the remedy suitably.

    Will my demand letter be used in the court?

    Should the breaching party not heed your demand letter, you have no option but to take this issue to the court of law. Here, you can present the demand letter you had written as evidence to the judge to show your efforts of trying for this matter to be resolved out of court.

    Can I send my demand letter for payment without a lawyer?

    While you can send the demand letter for payment by yourself, it’s best always to have an attorney with you. By doing this, you enjoy several advantages such as;

    • The lawyer’s presence is a clear sign to the breaching party about your intentions to take legal actions against them for not heeding your payment requests.
    • This letter will most likely be taken a lot more seriously by the breaching party if they see it’s been sent by an attorney, unlike a formal letter.
    • A demand letter from a lawyer comes with more weight compared to a formal letter.
    • The attorney can draft the demand letter in such a way it capitalizes on the laws governing the collection of other remedies.


    Writing the demand for payment letter is necessary to demand money owed to you. If you’re unfamiliar with everything about writing this letter, this in-depth article has enlightened everything you need to know.