Debt
Debt recovery letter of demand

This information sheet explains the function of a letter of demand for debt recovery. It includes a sample letter of demand for the recovery of money following your supply of goods or services (eg. sale of artwork, performance fees) to a person or organisation.

Debt recovery – small claims procedure (VIC)

When chasing payment for goods or services, the first step is generally to send a letter of demand to the other party telling them of the dispute and the money outstanding, and giving them a defined period within which to settle the matter or else face legal action.

This information sheet assumes that the contracts under which money is owed are legally enforceable, and that the debts are not subject to the National Consumer Credit Protection Act 2009 (Cth)or the National Credit Code. If you are unsure, please contact Arts Law on (02) 9356 2566 or toll-free on 1800 221 457.

When chasing payment for goods or services, the first step is generally to send a letter of demand to the other party telling them of the dispute and the money outstanding, and giving them a defined period within which to settle the matter or else face legal action.

When sending a letter of demand, you should be careful not to:

·         harass the debtor – they have the right to complain about this behaviour to particular government agencies and the police; or

·         send a letter which is designed to look like a court document because this is illegal.

A guideline on acceptable and unacceptable debt collection practices is published by the Australian Competition and Consumer Commission and the Australian Securities & Investment Commission (ASIC) It is available at the ASIC websiteas ASIC Regulatory Guide 96 - Debt collection guideline: for collectors and creditors; and is also available at the ACCC website.

For assistance with drafting This information sheet assumes that the contracts under which money is owed are legally enforceable, and that the debts are not subject to the National Consumer Credit Protection Act 2009 (Cth)or the National Credit Code. If you are unsure, please contact Arts Law on (02) 9356 2566 or toll-free on 1800 221 457.