Skip to content Skip to footer
Knowledge   >   I Want to Collect a Debt: The Importance of Sending an Admonitory Demand Letter

I Want to Collect a Debt: The Importance of Sending an Admonitory Demand Letter

Before resorting to the courts, the first step is to send an admonitory demand letter, which must meet certain requirements.

An admonitory demand letter is a formal notice sent by the creditor to the debtor, granting a final opportunity to fulfill the obligation within a newly defined, reasonable timeframe, thereby allowing a last chance to pay the outstanding amount without judicial recourse.

Should the debtor fail to comply, the breach is considered definitive, enabling the creditor to proceed legally. Besides the outstanding amount, the letter should also include a demand for interest on late payment, calculated at the statutory rate from the date the debt was originally due.

Although there is no specific legal form for sending an admonitory demand letter, for security and evidentiary purposes in a potential court case, it is recommended to send the letter by registered post with acknowledgement of receipt. This ensures the creditor can prove that the debtor received the letter, thereby fulfilling the formal demand requirement. The admonitory demand letter is thus a critical tool in preparing for possible legal proceedings.

The good news is that, often, receiving the admonitory demand letter prompts the debtor to voluntarily fulfill the obligation—either immediately or in installments through a negotiated payment agreement between the parties. This approach can prevent a more complex legal dispute, as the debtor understands the costs associated with judicial proceedings.