Debt Demand Letter
A formal letter sent out by one party that demands outstanding payment or performance by another party, and highlights the next steps of action if not complied with.
What is a debt demand letter?
A debt demand is a formal letter sent out by one party that demands outstanding payment or performance by another party, and highlights the next steps of action if not complied with. You can demand immediate payment of the debt, or propose a settlement or payment plan to resolve the matter. The debtor is advised of the potential legal consequences of failing to comply with the demand letter.
What does a debt demand letter cover?
A debt demand letter covers, amongst other things, details of the debtor and lender (if applicable), the date the debt owing should have been paid, whether interest is payable on the debt (including calculation of the interest and a current amount figure), and a threat of further action including litigation should they fail to respond.
When should I use a debt demand letter?
You should use a debt letter when you have an outstanding debt owed and want to start the formal process to revcover it. The debtor should be late on payment or have breached another term of your agreement.
Do I need a debt demand letter?
A debt demand letter can be used to obtain payment from clients, customers or indivduals who have failed to meet deadlines or agreed terms. It is often the case that the threat of legal action and interest payments is enough to push a debtor into making payment and honoring their agreement; thus preventing further legal action.
The statutory interest rate is currently 8%. You should be able to claim this amount of interest unless otherwise stated in your agreement or otherwise.
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