Guides / How to write a letter of demand
How to write a letter of demand, with an annotated example
A letter of demand works when it is accurate, specific and calm. This guide sets out what to include, what to leave out, and the usual format. It ends with a complete example letter for an unpaid business debt, with notes explaining each part.
What to put in a letter of demand
The correct legal names. Send the letter to the legal entity that owes you, and send it from the entity that is owed. A business name on its own does not tell you who is legally responsible. Check the debtor’s details on ABN Lookup, and for a company, run an ASIC search to confirm its exact name, ACN and registered office.
The amount and how it is calculated. List each invoice or advance, its date and amount, and every payment received. The total should be right to the cent. If you claim interest, show the rate, the period and the clause that allows it.
The basis of the claim. Say where the debt comes from: a signed contract, a quote accepted by email, an order, a loan. Give dates. If there is no written contract, describe how the deal was made.
The documents you rely on. Refer to them in the letter and attach copies: the quote or contract, terms of trade, invoices, statements, and any message where the debtor admitted the debt.
A clear deadline. Give a specific date and time, not “within 14 days of receipt”. Fourteen days is usual for a business debt.
What you will do next. State the step you will take if the money is not paid, such as filing a claim in the Magistrates’ Court of Victoria. Only say what you are actually prepared to do.
How to pay. Give bank details and a payment reference. Make paying easy.
An invitation to respond. Ask the debtor to tell you in writing, before the deadline, if they say any part of the amount is not owed. You want to know about a dispute now, not after you have filed a claim.
The numbers to know
14 days
Fourteen days is usual for a business debt.
What to put in a letter of demand
3 a week
For individual consumers, the guideline recommends no more than three contacts a week, or ten a month, and only when necessary.
What to leave out
6 years
A part payment also restarts the six-year limitation period for the debt.
Notes on the example
The usual format
A letter of demand is normally one or two pages, in this order:
- your letterhead or business details;
- the date, and how the letter is being sent;
- the debtor’s legal name and address;
- a heading that states the subject and the amount;
- the agreement, the work or goods, and the amount owed;
- the demand and the deadline;
- how to pay;
- the next step, and an invitation to respond;
- a list of enclosed documents, then a signature from someone with authority.
What to leave out
An inflated amount. Claim only what is owed. Do not add fees, interest or charges that your agreement does not allow. In Victoria, a person collecting a debt in trade or commerce must not misrepresent the extent of the debt or the consequences of not paying it.
Threats you will not carry out. Do not threaten legal action you have no intention of taking. The ACCC and ASIC debt collection guideline says this directly.
Threats of police or criminal charges. Failing to pay a debt is not a crime unless there is something more, such as fraud. Do not suggest that it is, or that you will go to the police, to get paid.
Pressure that becomes harassment. The Australian Consumer Law bans undue harassment or coercion when seeking payment for goods or services. Victorian law also prohibits harassment, intimidation and telling other people about the debt without a legitimate reason. For individual consumers, the guideline recommends no more than three contacts a week, or ten a month, and only when necessary.
Anything that looks official when it is not. A letter should not look like a court document, and should not appear to come from a lawyer if it does not.
If the debtor is an individual who bought goods or services for personal use, take extra care. The guideline was written mainly with individual debtors in mind, although many of its principles also apply to business debts.
Example letter of demand (annotated)
The businesses, people and details in this example are made up. The ACN shown is a placeholder.
BAYVIEW JOINERY PTY LTD ACN 000 000 000 (Note 1)
[Street address] · [Phone] · [Email]
18 May 2026
By email to [accounts email address] and by post (Note 2)
The Director
Hartley Fitouts Pty Ltd ACN 000 000 000
[Registered office address] (Note 3)
Letter of demand: unpaid invoices 1047 and 1052, $6,820.00 (Note 4)
Dear Director
We write about money Hartley Fitouts Pty Ltd owes Bayview Joinery Pty Ltd for joinery work.
The agreement (Note 5)
On 10 February 2026 you accepted our written quote Q-2210 by email. Under that quote we agreed to make and install the reception desk and storage joinery for your fit-out at [site address], and you agreed to pay each invoice within 30 days of its date. Our terms of trade were attached to the quote.
The work and the amount owing (Note 6)
We completed the work in two stages and invoiced you as follows:
| Invoice | Date | Due | Amount (incl GST) |
|---|---|---|---|
| 1047 | 3 March 2026 | 2 April 2026 | $4,180.00 |
| 1052 | 24 March 2026 | 23 April 2026 | $3,640.00 |
| Total invoiced | $7,820.00 | ||
| Less your payment on 15 April 2026 | ($1,000.00) | ||
| Amount owing | $6,820.00 |
You have not raised any complaint about the work.
Our reminders (Note 7)
We sent you a statement and reminder on 1 May 2026 and a further reminder on 8 May 2026. We have not received a reply to either.
Interest (Note 8)
Clause 7 of our terms of trade allows interest on overdue amounts. We have not added interest to the amount above. If we have to issue proceedings, we will claim interest under that clause.
Our demand (Note 9)
We demand that you pay $6,820.00 by 4 pm on Monday 1 June 2026.
How to pay (Note 10)
Please pay by bank transfer to:
Account name: Bayview Joinery Pty Ltd
BSB: [BSB]
Account number: [account number]
Reference: Hartley 1047 1052
Please call us on [phone] to confirm these details before you pay.
If you do not pay (Note 11)
If we do not receive the full amount by that time, we intend to file a claim against Hartley Fitouts Pty Ltd in the Magistrates’ Court of Victoria for $6,820.00, together with interest and costs.
If you dispute any part of this amount (Note 12)
Please tell us in writing before the deadline which part you dispute and why, and send any documents you rely on. We will consider what you send.
Enclosed (Note 13)
Quote Q-2210; terms of trade; invoices 1047 and 1052; statement dated 1 May 2026.
Yours faithfully
[Name]
Director, Bayview Joinery Pty Ltd (Note 14)
[Phone] · [Email]
Notes on the example
Note 1. Your legal name. Use the name of the entity that is owed the money, with its ACN or ABN. If you trade under a business name, show the company or person behind it.
Note 2. Date and delivery. Send the letter in a way you can prove, such as email and post, and keep a copy. The date fixes your deadline and is part of your record.
Note 3. The right debtor. Address the company or person who owes you, not only a trading name or the staff member you dealt with. For a company, use the registered office shown on an ASIC search. A demand addressed to the wrong party achieves nothing.
Note 4. A clear heading. State what the letter is and the amount claimed. Nobody can then say they missed the point.
Note 5. The basis of the claim. Explain when and how the agreement was made and the terms that matter: the price and when payment was due. If the deal was made by phone, say so and refer to any message that confirmed it.
Note 6. How the amount is calculated. List each invoice with its date, due date and amount, then subtract every payment. Here the part payment of $1,000 is credited. A part payment also restarts the six-year limitation period for the debt.
Note 7. Earlier reminders. These show the debtor has had a fair chance to pay. Keep it short.
Note 8. Interest only if your terms allow it. Bayview’s terms of trade include an interest clause, so the letter reserves the right to claim it. If your terms say nothing about interest, leave it out of the letter. See Interest, costs and time limits.
Note 9. A specific deadline. A date and a time leave no room for argument. Fourteen days is usual for a business debt.
Note 10. How to pay. Give everything needed to pay on the spot, with a reference. Emails with altered bank details are a known fraud risk, so invite the debtor to confirm your details by phone.
Note 11. The next step. Name the step and the court. Write only what you intend to do: the guideline treats threats of action that is not intended as unacceptable.
Note 12. Room to respond. A genuine dispute is better known before you file a claim. If the debtor is a company, a genuine dispute also matters if you later consider a statutory demand.
Note 13. The documents. Attach copies of what the claim rests on, so the debtor and, later, a court can check it.
Note 14. Signature. The letter should be signed by someone with authority to act for the business. Keep the tone factual from start to finish. No threats, no insults, no copies to the debtor’s customers or on social media.
Download the example
A free Word version of this example is available: Download the example letter (Word). Change every detail to suit your situation, and check the debtor’s legal name before you send it. The example and this guide are general information only. They are not legal advice about your circumstances.
Common questions
Have another question? Phone 1800 776 529 or send us a message.
No. There is no set form for a letter of demand in Victoria. A creditor’s statutory demand is different: it must be in the prescribed form.
Only where your contract or trading terms give you that right, and only to the extent they do. See Interest, costs and time limits.
Either can work. A lawyer’s letter is checked before it is sent and shows the next step is real. If the amount, the debtor’s identity or the basis of the claim is unclear, have it checked first.
Law referred to
- Australian Consumer Law and Fair Trading Act 2012 (Vic) s 45.
- Competition and Consumer Act 2010 (Cth) sch 2 (Australian Consumer Law) s 50.
- Australian Competition and Consumer Commission and Australian Securities and Investments Commission, Debt Collection Guideline: For Collectors and Creditors (Regulatory Guide 96, April 2021).
- Limitation of Actions Act 1958 (Vic) ss 5(1)(a), 24(3).
- Corporations Act 2001 (Cth) ss 459E, 459H.
Last reviewed: October 2026, by a Victorian solicitor with a current practising certificate. This page is general information about the law in Victoria as at October 2026. It is not legal advice about your circumstances.
Prefer to have a lawyer send it?
We can send your letter of demand on our letterhead for $440 including GST. We read your contract, invoices and messages, confirm the debtor’s correct legal name, email and post it no later than two business days after we have everything, follow up once, and pass on the reply with our view.
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Email: info@lettersofdemand.com.au
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