When to send one
- Usually after invoices and reminders have been ignored or a dispute has reached a standstill.
- Check your contract first: it may require notice, a dispute resolution process or a particular way of serving documents before you take further steps.
- Time limits apply to recovering debts. Do not let a matter sit for years before acting.
What to include
- Who you are and who the letter is addressed to (check the correct legal entity and ABN or ACN).
- What is owed and why: the contract, invoices, dates and amounts, with copies attached where helpful.
- Any interest or costs you are entitled to claim — only if the contract or law allows it.
- A clear, reasonable deadline for payment and how to pay.
- What you intend to do if the deadline passes, such as starting proceedings.
What to avoid
- Do not overstate the amount, threaten action you do not intend to take, or make threats that could be harassing or misleading. Debt collection conduct is regulated, particularly where consumers are involved.
- Keep it factual and professional. A court may later read it.
If you receive a letter of demand
- Do not ignore it. Note the deadline and gather your contract, invoices and correspondence.
- Consider whether you agree with the amount, dispute it in part, or have a counter-claim.
- A considered written response, or a proposal to pay by instalments, can avoid escalation.
If the debt is still unpaid
- Options may include negotiation or mediation, a claim in a court or tribunal (the appropriate forum depends on the amount and the state or territory), or insolvency-related steps against a company.
- Consider whether the debtor can actually pay before spending on enforcement.
Need help with this?
Tell us who owes the money, how much, and send the contract, invoices and any correspondence. We’ll discuss the options and engagement terms before acting.
General information only, not legal advice. Laws differ between states and territories and depend on your circumstances.