What is a Demand for Payment?
The notice is used when a customer or other individual just will not pay that money that is owed. Its goal is to let the recipient know that the sender means business and that further action may be taken if payment is not made on or before a certain date.
Why is a Demand for Payment used?
In almost all cases, a creditor will need to show that they have made formal efforts to have the outstanding amount paid before they can proceed with legal action. Even if the matter does not end up in court, a formal demand will in most cases get the attention of the recipient and hopefully bring a speedy resolution.
When is a Demand for Payment used?
Many businesses choose to first attempt to collect the unpaid amounts with a friendly email or phone call in hopes of preserving a future relationship with the non-payer. However, there are times when friendliness goes out of the window and a creditor must decide whether or not they themselves want to continue doing business with the customer at all.
Use discretion and do your best to balance between fair enough to maintain a good reputation and brand image, yet firm enough to let customers know that you expect payment to be made as promised.
How should a Demand for Payment be issued?
Creditors should always check the terms of any contract or agreement and the regulations of their province to confirm if any specific delivery methods of formal notice are required. In many cases issuing this type of notice by email or text will not be considered valid, so using a verifiable method such as prepaid registered mail or hand delivery is advisable.
Where should a Demand for Payment be issued?
These notices should be issued to any and all relevant known addresses for the debtor. This may be as provided on any contract or service agreement, or as found on any public listings for the customer. If the debtor is a company and you are relatively certain that court action will be necessary, it will be worth it to run a company search to make sure that you have issued notice to their registered delivery address.
Create Your Own
Now that you know the basics, you’re ready to start getting paid. Create your own Demand for Payment now!
