Free template
Demand letter template for payment of money owed
A formal written demand for payment, often the last step before litigation or small claims court. Free, copy-and-paste, written for business creditors.
What a demand letter does
A demand letter formally sets out what is owed and why, and gives the debtor a final chance to pay before you take legal action. Some courts and contracts expect a written demand before suit. Even when one isn't required, a clear demand creates a record and often prompts payment.
Tips
- Keep it factual and specific: dates, invoices, contract terms and the exact amount
- Send it by a trackable method (for example certified mail and email) and keep proof
- Don't threaten action you can't or won't take, and never threaten criminal charges to collect a civil debt
- If the debtor is an individual consumer, consumer-protection laws apply. Consider attorney review.
- An attorney demand letter on law-firm letterhead can carry more weight for larger balances.
The template
[Your Company Name] [Address] · [Phone] · [Email] [Date] VIA CERTIFIED MAIL AND EMAIL [Debtor Company Name] Attn: [Owner / Officer Name] [Address] RE: Formal Demand for Payment — $[Amount] [Contract / Account / Invoice references] Dear [Name], This letter is a formal demand for payment of $[Amount] that [Debtor Company Name] owes [Your Company Name]. Background: • On [Date], [Debtor] agreed to [purchase goods / receive services] under [contract / purchase order / terms, reference]. • We [delivered the goods / performed the services] on [Date(s)] and invoiced [Invoice numbers, dates, amounts]. • Payment was due on [Due Date]. Despite our reminders on [Dates], the balance remains unpaid. • [Optional: You acknowledged the balance on [Date] by [email / call / partial payment].] Amount due: Principal: $[Amount] [Late fees / interest as permitted by our agreement: $[Amount]] Total: $[Total] Demand: Please pay $[Total] by [Deadline Date] by [payment method / link / address]. If you dispute any part of this balance, please send the specific basis for the dispute in writing to [Email/Address] by [Deadline Date]. If payment is not received by [Deadline Date], we intend to pursue available remedies, which may include referring this matter to a collection agency or attorney and filing a lawsuit to recover the balance [and, where our agreement or law allows, interest, attorney's fees and costs]. Nothing in this letter waives any of our rights or remedies. Sincerely, [Name] [Title] [Company Name] Enclosures: [Contract/terms], [Invoices], [Statement of account]
If the demand goes unanswered
Your options include placing the account with an agency, filing in small claims court (limits vary by state), or having an attorney file suit. Compare them in collection agency vs. collection attorney, or get matched.
Not legal advice. This page is general information, not legal advice, and laws vary by state and change over time. CollectionPlacement is a referral service, not a law firm or collection agency. Consult a licensed attorney about your situation.
Frequently asked questions
Is a demand letter legally required before suing?
Not always. It depends on the state, the court and your contract. Even when it isn't required, a demand letter creates a useful record and often prompts payment.
Should I send a demand letter myself or have an attorney send it?
For small balances, a self-written letter is common. For larger or disputed balances, a letter from a collection attorney may be more effective and lets counsel shape the claim.
How should I send a demand letter?
Use a method with proof of delivery, such as certified mail, and also email it. Keep copies.
Can I use this template for a consumer debt?
It's written for business debts. Consumer debts are subject to additional laws, so consider attorney review first.
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