Lending money to a friend or family member rarely ends well when something goes wrong. They stop responding, the deadline passes, and you’re left feeling like an idiot for not putting it in writing. Here’s the unwelcome reality: you almost certainly do still have an enforceable claim, and a Letter of Demand is the right first step.
The legal context
A loan does not need a written contract to be enforceable. Bank-transfer evidence, text messages saying “I’ll pay you back next month”, and witness testimony all support an oral or implied contract. The borrower may try to argue the money was a gift. If they say it was a gift, you have to show it was a loan: messages about paying it back, transfer descriptions, or any repayment.
Small-claims jurisdiction in every state covers personal loans up to amounts that comfortably cover most informal lending — generally up to $10,000 to $25,000 depending on state.
Realistic outcomes
The honest truth: many borrowers respond once a formal letter arrives because the social dynamic shifts — the lender is no longer “asking”, they are signalling tribunal action and a credit-file impact. Default judgments are real and follow people for years. Even if the borrower has no money today, a judgment is enforceable for 12 to 15 years.
Ready to put it in writing?
Answer 3 quick questions to check you have the details your document needs, and see your next step.
1. Who owes you?
2. How much?
3. Do you have it in writing?
Your result is ready. Where should we send it?
The document approach
The letter should set out the loan, the date, the amount, the agreed repayment (or, if none was agreed, “a reasonable time”), attach the bank-transfer evidence and any messages, and demand repayment within 14 days. It should warn of tribunal action and judgment.
What Claim Done delivers ($49)
For a flat fee, we draft a tribunal-grade Letter of Demand in your name, citing the implied contract, ready to send.
What to expect after
Send by email and registered post. If repayment doesn’t happen, lodge a small-claims application. Default judgments are common in personal-loan matters because borrowers often don’t appear — a default judgment is just as enforceable as a contested one.
Send a formal Letter of Demand. Done in about 5 minutes.
No card until the end. No subscription.
What happens when you send a Letter of Demand
Same problem. What a prepared case looks like.