Problems with Debt? Here’s How To Send A Letter Of Demand

Taylor joined the family law and litigation team at Unified Lawyers in 2019. Taylor has completed a Bachelor of Laws and Bachelor of Arts in Communication (Social and Political Science)...

Problems with Debt

If someone owes you money, you should speak to them about the debt. A gentle reminder may be all it takes to get your money back. If they really have a hard time paying you back and you value the relationship with them, you can negotiate a payment arrangement where they will pay you back in instalments. In the case that they just can’t or won’t pay you back, you may need to see a debt recovery solicitor.

What is a letter of demand?

If someone owes you money and refuses to pay you back, sometimes all you need to recover your money is to send them a letter of demand from your solicitor. Most Sydney debt recovery lawyers can help you with this. The letter of demand informs the debtor that if they don’t pay you back the debt within a certain time, you’ll take legal action against them. Most people pay right away to avoid legal fees and in some instances, having to pay you interest on the debt.

If on the other hand you are the one to receive a letter of demand and you don’t have to money to pay the debt or you are not sure if you owe the money, you should contact a debt recovery solicitor for help. Debt recovery solicitors often negotiate with creditors on behalf of their clients to arrange some kind of payment plans or to dispute the claim.

What if the debtor chooses to ignore the letter of demand?

If the debtor fails to pay back the debt within the time specified in the letter of demand, your Sydney debt recovery lawyer will file a Statement of Claim with the court. Your debtor can still pay you back at this time. By the same token, if someone files a Statement of Claim against you, you can pay the debt within 28 days or ask your solicitor to negotiate a deal with the creditor.

If you think the claim is wrongly filed against you and you don’t owe the money, your solicitor will lodge a defence against the claim on your behalf to dispute the debt.

How does the hearing work?

Before the hearing, Sydney debt recovery lawyers have to submit all evidence and statements from witnesses in writing to the court on behalf of their clients. You will need to work with your solicitor closely to prepare these documents. During the hearing, both sides will have a chance to present their case. Cross-examination is generally required if the amount is over $10,000.

If you are the creditor and the court rules in your favour, then your debtor will have to pay back the debt and usually a portion of your legal fees. Sometimes your debtor’s solicitor may propose a payment arrangement and if you agree, the debtor can pay you back by instalment.

If you have any queries about debt recovery feel free to contact one of our debt recovery lawyers at Unified Lawyers on 1300 667 461.

DISCLAIMER:  The content of this publication does not constitute legal advice and is intended only to provide a summary and general overview  We do not guarantee that it is current.  You should seek specialist legal advice or other professional advice about your specific circumstances.  Your access to this publication is not intended to create nor does it create a solicitor-client relationship between you and Unified Lawyers.

Taylor joined the family law and litigation team at Unified Lawyers in 2019. Taylor has completed a Bachelor of Laws and Bachelor of Arts in Communication (Social and Political Science) at the University of Technology Sydney and holds a Graduate Diploma of Professional Legal Practice.