How to Write a Letter of Demand for a Debt in Australia

A letter of demand is the most common first step when someone owes you money and refuses to pay. It sets out the debt, the legal basis for the claim, and a deadline for payment before you escalate to court or tribunal proceedings.

This guide walks through how to write a letter of demand for a debt in Australia, what to include, what mistakes to avoid, and how Claim Done automates the process.

What is a letter of demand?

A letter of demand is a formal document requiring payment of a specific sum within a set timeframe. In most cases it is not a legal requirement, but it is standard practice: tribunals and courts expect you to have tried to resolve the dispute before you file, and a clear written demand is the usual evidence that you did.

The letter serves three purposes:

• Formal notice — puts the debtor on notice that you are serious about recovering the debt
• Evidence — creates a paper trail showing you attempted to resolve the matter before litigation
• Settlement opportunity — gives the debtor one last chance to pay before you incur legal costs

A well-drafted letter citing the correct legislation often prompts immediate payment.

When to send a letter of demand

Send a letter of demand when:

• An invoice remains unpaid after the due date and follow-up reminders have been ignored
• A contractor, client, or supplier owes you money under a written or verbal agreement
• A rental bond has not been returned after you vacated the property
• You lent money to someone and they refuse to repay it
• Goods or services were paid for but not delivered, and the seller refuses a refund
• Someone damaged your property and refuses to cover the repair cost

Do not send a letter of demand if the debt is genuinely disputed, the amount is uncertain, or the matter involves criminal conduct.

Your details and the debtor’s details

Start with your full name or business name, address, and contact details. Then set out the debtor’s full name or registered business name and their address.

If the debtor is a company, use the registered office address listed on the ASIC register. If it is an individual, use their last known residential or business address.

A clear statement of the debt

State the exact amount owed, how the debt arose, and the date it became due.

Example:

“You owe me $3,450.00 for landscaping services completed on 12 March 2025 under our written agreement dated 1 March 2025. Payment was due on 26 March 2025. As of today, the invoice remains unpaid.”

Be specific. Attach copies of the invoice, contract, or other evidence that proves the debt.

The legal basis for the claim

Cite the applicable Australian law that supports your claim. Common grounds include:

• Breach of contract — the debtor agreed to pay and failed to do so
• Australian Consumer Law — goods or services were defective and the debtor refuses a refund
• Unjust enrichment — the debtor received a benefit and it would be unjust for them to keep it without paying
• Loan agreement — money was lent and the debtor agreed to repay it

You do not need to write a legal essay. A single sentence citing the relevant statute is typically sufficient.

A demand for payment

State clearly what you want: payment of the full amount, by a specific date, to a nominated bank account or address.

Example:

“I demand payment of $3,450.00 in full by 5:00 pm on 15 May 2025. Payment must be made by bank transfer to the following account: [BSB and account number].”

Give the debtor at least 7 days to pay. In some states, 14 days is standard. Do not set an unrealistic deadline.

Consequences of non-payment

Explain what will happen if the debtor does not pay by the deadline. Common next steps include:

• Filing a claim in the relevant state or territory tribunal (VCAT, NCAT, QCAT, etc.)
• Commencing proceedings in the Magistrates Court or Local Court
• Engaging a debt collection agency
• Reporting the debt to a credit reporting agency (if applicable)

Do not make threats you cannot follow through on. Do not threaten criminal prosecution — debt is a civil matter.

Professional tone and format

Use plain, direct language. Do not insult the debtor, do not use aggressive language, and do not make accusations beyond the facts.

The letter should be typed, dated, and signed. Send it by registered post or email with read receipt. Keep a copy for your records.

What to avoid in a letter of demand

Do not exaggerate or fabricate

Only include facts you can prove. Do not inflate the amount owed, do not invent terms that were never agreed, and do not cite statutes that do not apply.

Do not threaten criminal action

Debt recovery is a civil matter. Threatening to report someone to the police or accusing them of fraud can backfire and expose you to a defamation claim.

Do not send it to the wrong address

If the debtor is a company, send it to the registered office. If it is an individual, send it to their last known address. A letter sent to the wrong place has no legal effect.

Do not skip the letter and go straight to court

Most tribunals and courts require proof that you attempted to resolve the matter before filing. Skipping this step can delay your case or result in costs being awarded against you.

How to send a letter of demand

Send the letter by:

• Registered post — Australia Post’s registered post service provides proof of delivery
• Email with read receipt — acceptable in most cases, especially if prior communication was by email
• Both — send by registered post and email for maximum certainty

Keep a copy of the letter, the envelope, the tracking receipt, and any delivery confirmation. You will need this evidence if the matter proceeds to tribunal or court.

What happens after you send the letter

Three outcomes are possible:

1. The debtor pays — the matter is resolved. Confirm receipt of payment in writing and keep records.
2. If the dispute is spurious, proceed to the next step.
3. The debtor ignores the letter — after the deadline passes, you can file a claim in the relevant tribunal or court.

Most letters of demand result in payment or settlement. Debtors know that ignoring a formal demand leads to tribunal proceedings, which are public, time-consuming, and often result in a judgment against them.

How Claim Done automates the process

Writing a letter of demand from scratch is time-consuming. You need to research the applicable law, format the letter correctly, and ensure every required element is included.

Claim Done removes the guesswork:

1. Complete a 5-minute intake form — tell us what happened and what evidence you have (invoice, contract, emails, etc.)
2. Our Programmatic Algorithms draft your letter — they work from your answers and generate a professionally formatted letter of demand citing the applicable Australian law
3. We send it — Claim Done delivers the letter to the debtor by email

Flat fee. No subscription. Done in about 5 minutes.

The letter is tailored to your specific facts, cites the correct legislation, and meets the formal requirements for tribunal or court proceedings if the debtor does not pay.

Get your letter of demand sent today

A letter of demand is the fastest, cheapest way to recover an unpaid debt in Australia.

If you are owed money and the debtor is ignoring you, Claim Done generates and sends your letter of demand by email for $49. Tell us what evidence you have, answer a few questions, and we handle the rest.

Generate your letter of demand now.

Frequently Asked Questions

How much does it cost to send a letter of demand in Australia?

If you write it yourself, the only cost is postage (around $10 for registered post). Claim Done generates and sends a letter of demand for a flat fee.

How long should I give the debtor to pay?

At least 7 days is standard, though 14 days is safer and more commonly accepted by tribunals. Do not set an unrealistic deadline like 24 hours — it undermines the credibility of your letter.

Can I send a letter of demand by email?

Yes, if prior communication was by email and you can prove delivery (read receipt or delivery confirmation). Sending by both email and registered post is the safest approach.

What if the debtor ignores my letter of demand?

After the deadline passes, you can file a claim in the relevant state or territory tribunal (VCAT, NCAT, QCAT, etc.) or the Magistrates Court. The letter of demand serves as evidence that you attempted to resolve the matter before commencing proceedings.

Do I need to cite specific laws in my letter of demand?

Yes. Citing the applicable Australian law (such as breach of contract, Australian Consumer Law, or unjust enrichment) strengthens your letter and shows the debtor you are serious. Claim Done’s Programmatic Algorithms automatically cite the correct legislation based on what you tell us.