Use our Demand Letter for Payment to demand immediate payment of an overdue loan.
Updated September 21, 2023
Written by Ioana Gagiuc | Reviewed by Brooke Davis
A Demand Letter for Payment is typically sent to notify a party that they defaulted on specific financial obligations.
It is a formal written request for payment of a debt that is owed, and it usually outlines the amount owed, the date by which the payment should be made, and the consequences of not making the payment by the specified date.
A document used to launch breach of contract disputes against a party for violating the terms of an agreement.
A document used to request a refund in exchange for a return of a good or service.
A document used to request another party to pay their fair share of child care costs.
A document used to demand immediate payment from an employer for unpaid wages.
A document used to launch settlement negotiations for the harm suffered in an accident.
A document used to file a complaint in a Small Claims court.
A document used to request an individual or entity to return a piece of personal property.
A document used to respond to a demand for payment letter sent by another party.
A Demand Letter for Payment is a document that informs someone that they are indebted to an individual or company. It includes the reason for the debt and recovery methods and describes what happens if the recipient doesn’t reply or repay the debt before a deadline.
In many jurisdictions, when first recovering a debt, parties first try to recover it through means other than small claims court or a lawsuit. Consider a demand for payment letter as an initial, non-confrontational approach to recovering a debt.
A demand for payment letter is used when someone owes you money. Remember, every situation is fact-specific and should be approached differently. Here are some common cases where a demand for payment letter is recommended:
Because your demand for payment will be used in a court claim, be polite, stick to the facts, and clarify your expectations without being unreasonable or disrespectful.
There are situations where a professional invoice template will do. For example, if you are a building contractor and have completed work as agreed, you shouldn’t send a demand for payment on the work completion date.
There are a couple of potential consequences for not sending a demand for payment.
We provide a step-by-step guide on how to write a demand letter.
When writing a demand letter for payment, use clear and concise language to detail the amount owed, including any additional fees or interest, and specify a firm deadline for payment. Identify all parties involved and provide detailed payment instructions.
Maintain a professional and polite tone while outlining non-payment consequences, including legal action or reporting to credit agencies.
If a debtor fails to respond to a demand letter or does not pay by the specified deadline, you may consider taking further action to recover the debt.
Here’s an expanded overview of the possible steps:
The payor, or debtor, is the person who owes money to the payee or debtee. You must fill in both parties’ contact information in the document, such as their names and address.
You should also include the contact information of someone the payor can contact if they have questions. This individual could be the person creating the letter or related to the payee.
Specify the method of communication by listing either postal mail, phone, or email.
Write down the payment information, including information regarding the late payment:
Finally, date the letter and then send it to the payor.
You should include certain fundamental information in the demand for payment letter. Such information is detailed below:
Below is a sample language often included in a demand letter for payment:
| Party Information | From: Cam Contractor To: Joe Blow |
| Date Debt Was Incurred | On June 15, 2017, I completed the installation of your patio. |
| Details of Debt | Our agreement was that I would install your patio for $5,000. You agreed to pay me $2500 upfront, and another $2500 upon completion. While you did, in fact, pay me $2500 up front, you have not paid me the $2500 due upon completion. |
| Details of Prior Attempts to Collect the Debt | On June 16, 2017, I sent you an invoice for the remaining balance of $2500, with a due date of July 15, 2017. On July 16, 2017, I sent you another invoice marked “Past Due – Please pay upon receipt.” |
| Expectations of Payment | I expect the balance due of $2500 to be paid within 14 days, which is August 14, 2017. |
| Consequences for Non-Payment | If I do not receive payment by August 14, 2017, I will have no choice but to file a claim in small claims court for the amount due and owing, $2500, as well as any reasonable costs allowed by law. |
Below is a sample demand for a payment letter. You can download our free template in PDF or Doc format and fill it out on your own.
Be sure to send a demand for payment using a method that allows you to obtain proof of receipt. This can be return service requested, certified mail, or through a signature program offered by a private delivery service.
No, a demand for payment does not need to be notarized. However, if you file a claim in court, you may be required to swear to the truth of the allegations you make about the facts of your case.
Consequently, just as with an affidavit, you should limit your demand for payment to facts. Your demand may later be admitted into evidence in a court of law.
You can negotiate payment or stand firm on your original conditions. Only you can decide which course of action is best for you. In any event, make sure to document this exchange in writing.
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