What is a letter of demand?
A letter of demand is a formal written notice from a lawyer requiring a debtor to pay an outstanding debt within a specified timeframe — typically 7-14 days. It's the first step in the debt recovery process and the most cost-effective way to recover what you're owed without going to court.
A solicitor's letter of demand isn't just a request for payment. It's a clear signal that you're serious about recovering your money and that you have legal representation prepared to take the matter further if the debtor doesn't respond.
When should you send a letter of demand?
You should consider a letter of demand when:
- An invoice has been overdue for 14 days or more and reminders have been ignored
- The debtor has stopped communicating about the outstanding amount
- You want to establish a clear paper trail before escalating to legal proceedings
- You need to demonstrate that you've taken reasonable steps to resolve the debt
A letter of demand is also a legal prerequisite for many court actions. Under Australian pre-action protocols, you're generally required to give the debtor a reasonable opportunity to pay before filing proceedings. Our letter of demand satisfies this requirement.
What does a letter of demand include?
Every letter of demand we prepare includes:
- The amount owed — including any interest or late fees under your terms of trade
- The basis of the debt — referencing the contract, invoice, or agreement
- A clear deadline — typically 7-14 days to pay in full
- Consequences of non-payment — the specific legal action we'll take, including court proceedings and cost implications for the debtor
- Payment instructions — making it easy for the debtor to pay immediately
Why a lawyer's letter makes a difference
There's a significant difference between an email from your accounts team and a formal letter from a law firm. Debtors understand that a solicitor's letter means you've engaged legal representation and you're prepared to escalate. Our clients see a 60-70% resolution rate from the letter of demand alone — before any court proceedings are necessary.
At Hilton Bradley, every letter of demand is drafted by a practising lawyer, not a debt collection agent. That means the legal analysis behind the letter is sound, and the debtor knows it.
Our approach
We start with a free assessment of your matter. If your debt qualifies for our no-win-no-fee arrangement, we'll issue the letter of demand at no upfront cost to you. Here's how it works:
- Step 1: You provide us with the invoice, contract, and any correspondence with the debtor
- Step 2: We review the documentation and confirm your legal position
- Step 3: We issue a formal letter of demand, typically within 24-48 hours
- Step 4: If the debtor pays, you receive the full amount less our agreed fee (recovered from the debtor). If they don't, we advise on the next step — whether that's a statutory demand, court proceedings, or another strategy
What happens after the letter?
If the debtor pays within the 7-14 day window, your matter is resolved. If they don't, the letter of demand has established the foundation for further legal action. The next step depends on your specific situation:
- For company debts over $4,000 — a statutory demand under s459E of the Corporations Act gives the debtor 21 days to pay or face a presumption of insolvency
- For disputed debts or individual debtors — court proceedings in the appropriate jurisdiction
- For ongoing trading relationships — a negotiated payment plan with enforceable terms
Cost structure
For eligible matters, our letters of demand are issued on a no-win-no-fee basis. We recover our legal costs from the debtor — you're not out of pocket. During your free initial consultation, we'll confirm whether your matter qualifies and explain exactly what to expect.
The information on this page is general in nature and should not be relied upon as legal advice. Please contact us for advice specific to your situation.
