Debt Recovery - Letter of Demand
Debt Recovery -
Letter of Demand
Startups and new ventures always have a lot of costs coming in and going out. They also don't have time to wait for late payments. If your company is constantly going through the tiresome process of chasing up debts then a letter of demand may be able to solve a few issues.
WHAT DOES IT COVER?
Essentially a Letter of Demand is an ultimatum. It is useful if you are owed money and have been unsuccessful in recovering it. It is a final request for payment of the outstanding invoice or debt and it is usually the final step taken before issuing legal proceedings. It will state how much is owed, the reason it is owed and by what date it needs to be paid. Finally, it will include a warning that legal action will be taken if the debt is not paid by that date.
WHY IS THIS IMPORTANT?
A Letter of Demand sends a strong message to the debtor that you expect the outstanding sum to be repaid quickly. It indicates that you are willing to resort to legal action to recover the debt and are serious enough to have engaged legal help to take this step for you.