​ሕግንና ደንብን በተመለከተ እርዳታ ማግኘት ይፈልጋሉን? - Amharic | هل تحتاج لمساعدة قانونية؟ - Arabic | ܤܢܝܼܩܵܐ ܝ݇ܘ̤ܬ ܠܗܲܝܵܪܬܵܐ ܩܵܢܘܿܢܵܝܬܵܐ؟ - Assyrian | Need Legal Help? - Auslan | Treba li vam pravna pomoc? - Bosnian | Burmese â Need Legal Help? | 需要法律帮助吗? - Chinese Simplified | 需要法律幫助嗎? - Chinese Traditional | Trebate li pravnu pomoć? - Croatian | ضرورت به کمک قانونی دارید؟ - Dari | Wïc Kuɔɔny në Wɛ̈t Löŋ? - Dinka | آیا به کمک حقوقی نیاز دارید؟ - Farsi | Gadreva na Veivuke Vakalawa? - Fijian | Kailangan ninyo ba ng tulong na panglegal? - Filipino | Besoin d’aide juridique ? - French | Χρειάζεστε βοήθεια σε νομικά ζητήματα - Greek | क्या आपको कानूनी सलाह चाहिए? - Hindi | Butuhkan Bantuan dalam Masalah Hukum? - Indonesian | Hai bisogno di assistenza legale? - Italian | ត្រូវការជំនួយលើបញ្ហាផ្លូវច្បាប់ឬទេ? - Khmer | 법적인 도움이 필요하십니까? - Korean | Ви треба ли помош со правни работи? - Macedonian | कानूनी सहयोग चाहिएको छ? - Nepalese | Necessita de ajuda com questões jurídicas? - Portuguese | Вам нужна юридическая помощь? - Russian | E Manaomia Fesoasoani i Mea Tau Tulafono? - Samoan | а ли вам треба помоћ у правним питањима? - Serbian | Ma u baahan tahay Caawimmad xagga sharciga ah?- Somali | ¿Necesita ayuda con cuestiones jurídicas? - Spanish | சட்ட உதவி தேவையா? - Tamil | ท่านต้องการความช่วยเหลือทางด้านกฎหมายไหม? - Thai | Fiema’u ha tokoni Fakalao? - Tongan | Yasal Danışmaya İhtiyacınız mı var? - Turkish | Cần Được Giúp Đỡ Về Luật Pháp? - Vietnamese |

Responding to a letter of demand

If the debt is a mortgage loan or credit card you should get legal advice. You may have other options  

A letter of demand is usually the first step a creditor will take to try and get you to pay them money. This might be because of a debt or because they say you owe them money after a car accident.

The letter may say:

  • how much money is owed
  • why the money is owed, for example because of a debt or as a result of a car accident
  • when the money should have been paid, if the debt was due by a certain date
  • when the money needs to be repaid
  • what the creditor will do to recover the debt if the money is not repaid.

Alert Icon  If you are unsure if you owe the money, if the debt is more than six years old or if the car accident happened more than six years ago, you should get legal advice.

Alert Icon  Whenever you write to the creditor, you should make sure to only include things that you may want to rely on in court. You should double check any money amounts and dates to make sure they are correct. If you disagree that you owe the money claimed or that you were at fault in the car accident, it is also important that you don't write anything in your letter that admits you owe the money or were at fault.

Alert Icon  Make sure you keep a copy of the letter of demand and your written response. Also, make dated notes of any telephone conversation you have with the creditor

You have five options when you receive the letter of demand:

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    Here is some more information about these options:

    Admit you owe the money

    You may agree that you owe part or all of the money that the creditor is asking for. In this case, you should think about the following issues before writing back to the creditor:

    • How much of the money do you agree you owe?
    • If you don't owe all the money, why don't you think you owe the whole amount?
    • If you don't owe the whole amount, can you prove why?
    • Can you pay the money back in one payment, or will you pay it back over time?
    • If you can't pay the money back now, when will you be able to pay the money back?

    It is a good idea to get help working out what payments you can afford from a financial counsellor. You can find a free financial counsellor through the website of the Financial Counsellors' Association of NSW (FCAN).

    In your letter you should include information about:

    • the amount of the debt you agree you owe
    • your offer to pay back the debt. If you cannot repay the whole amount owed you may offer to pay a lump sum less than the amount owed, or to pay the debt by instalments
    • if you are offering to pay less than the full amount or by instalments, include information about your financial position, including your income, partner and children you support, and other debts.

    When the creditor has your response to the letter of demand, they will decide whether to accept your offer, 'write off' all or part of the debt, or take the case to court.

    An agreement to pay the debt by instalments is informal, but you should still record the agreement in writing. For more information, see Settling the case and Sample agreement for payment by instalments.

    Alert Icon  Even after making an instalment agreement, the creditor can still start a court case about the debt. This is more likely to happen if you miss some of the instalment payments.

    For more information, see Sample responses to letters of demand.

    Car icon  If the claim a​gainst you is about a car accident, see Sample responses to letters of demand - Car Accidents.

    Deny you owe the money

    You may decide, after reading the letter of demand, that you don't owe them all or some of the money or you don't think you caused the accident. If this is the case, you should write back to the creditor and tell them why you don't think you owe the money.

    If the creditor does not accept your denial, they may start a court case to get the money.

    For more information, see Sample responses to letters of demand.

    Ask for more information

    If you don't know whether or not you owe money to the creditor because they didn't give you enough information, you can write back to the creditor to ask for more information. This is known as a 'request for further and better particulars'.

    In your letter you should be careful not to admit or deny that you owe the debt. You should ask the creditor for information and documents that will help you decide if you owe the money, including:

    • invoices and bills
    • quotes
    • contracts
    • emails and letters
    • statements.

    Depending on the creditor's reply, you can work out whether or not you owe the money.

    For more information, see Sample letter asking for further and better particulars.

    Do nothing

    Ignoring a letter of demand is not a good idea. You should remember that a letter of demand is the first step for many creditors before they start a court case. If you do nothing, you may miss the chance to sort the problem out before you end up in court.

    Negotiate with the creditor

    Instead of court, a creditor may invite you to go to mediation to try and sort out how much money is owed. Alternatively, you could propose going to mediation when replying to a letter of demand.

    You can contact the Community Justice ​Centre​ (CJC) to arrange a free mediation session. They will contact the creditor to arrange a suitable date.

    At mediation there is an independent person, called the mediator, who helps the parties try and settle their dispute through discussion and negotiation. The mediation is confidential and all discussions are 'Without Prejudice'. This means that anything said during the mediation cannot be used against a party if the case goes to a court hearing later.

    If you have come to an agreement at mediation, it is a good idea to put it in writing, for your own records and as evidence, if the creditor goes to court later on.

    Alert Icon  If you want to write to the creditor to offer to settle the matter, you can write the words 'Without Prejudice' on your letters. This means the letters and emails sent between you and the creditor as part of your negotiations usually can't be used as evidence if a claim is later made in court.

    Car icon  For an example of a written agreement that releases you from further claims after a car accident, see Sample Release - Car Accidents.

    For more information on mediation, see Mediation.

    For further information, see Responding to a letter of demand - Frequently Asked Questions.