I've received a letter of demand
A letter of demand looks serious, but it's a formal request for payment — not a court order. You have time to read it carefully and decide what to do.
This guide helps you
- Understand what a letter of demand is and isn't
- Read the letter properly before reacting
- Know your options for responding
- Find free help if you can't pay or disagree
6 min read
What's happening
A letter of demand is a written request asking you to pay a debt by a certain date. It may warn that further action could follow if you don't respond. It is not, on its own, a court judgment — it's a step before that.
Receiving one means it's time to act, but not to panic. Read it carefully first.
Your first steps
Don't ignore the letter, but don't rush either. Start here:
- Read the whole letter and note the amount, the creditor, and the deadline.
- Check the debt is yours and the amount looks right.
- Keep the letter and the envelope — you may need them later.
If anything is unclear, you can write back and ask for more detail in writing.
Step by step
- Identify the sender. Is it the original creditor, a law firm, or a collection agency?
- Check the claim. Does the debt belong to you and is the amount correct?
- Decide your position. Can you pay, do you want to negotiate, or do you dispute it?
- Respond before the deadline — even a short note saying you're getting advice can help.
- Get free advice if you're unsure or can't pay.
Your rights
You're entitled to ask for evidence of the debt and to dispute it if you believe it's wrong, already paid, or not yours. There may be time limits on enforcing old debts, but these differ by state and circumstance — check your situation rather than assuming. Don't sign anything you don't understand.
Where to get free help
A financial counsellor can help you understand the letter and your options at no cost. Call the National Debt Helpline on 1800 007 007. For complaints about how a creditor is acting, see the relevant bodies in our directory.
Key takeaways
- A letter of demand is a request, not a court order.
- Read it fully and check the debt before responding.
- Responding before the deadline — even briefly — is better than silence.
- Free help is available on 1800 007 007.
Frequently asked questions
Is a letter of demand the same as being taken to court?
No. It's usually a step before any court action. Responding promptly can sometimes stop matters going further.
What if I can't pay the full amount by the deadline?
Contact the sender or a free financial counsellor. You may be able to negotiate a smaller payment or a plan you can manage.
What if I think the debt is wrong?
Write back disputing it and ask for evidence. Keep copies of everything and seek free advice if you're unsure.
This is general information, not legal or financial advice. Your situation is unique and rules can vary by state and over time — for advice on your circumstances, speak to a free financial counsellor (National Debt Helpline 1800 007 007) or get legal help.
Know your options, know your rights
A free, plain-English guide to dealing with debt in Australia — and the people who can help.