Home > Legal information > Centrelink, work and debt > Debt > Creditor notices and letters of demand

Creditor notices and letters of demand

If you do not repay a debt in the way that you have agreed to, a creditor will often send notices or letters to try to get you to pay.

Note: Some creditors may send letters that look like court documents to make you think court action has been started. This is illegal. If you are not sure whether a document is real, get help.

Statutory notices

Some legislation, such as the Consumer Credit Code (link below), requires creditors to send you specific notices before they can take further action to force you to pay the debt.

These notices say how long you have to bring your repayments up to date before further action will be taken. For example, notices about loan accounts covered by the Consumer Credit Code must give you at least 30 days to bring the account up to date.

Letters of demand

Creditors will usually (but not always) send a letter of demand – also known as a final notice – before taking further action. The letter may also come from the creditor’s solicitor or a debt collection agency.

The letter will ask you to pay the debts and tell you they will sue if you do not pay. If you do not pay the debt, or if other arrangements are not made, the creditor may start court proceedings. See ‘Being sued’ (link below).

A letter of demand is not a court document.

The letter will be sent to your last known address. It is your responsibility to tell creditors of any change of address.

Added costs

Some letters of demand include claims for additional amounts of money above what you owe, referred to as ‘fees’ or ‘costs’ for recovering the debt.

You may not have to pay the extra costs if they are not included in the terms of the contract between you and the creditor. Get legal advice.

What should I do if I receive a letter of demand?

It can be hard to know whether the debt is yours, and whether the correct amount is being claimed, especially if the debt has been ‘sold’ by the creditor to another party, such as a debt collection agency.  See ‘Deciding whether you owe the debt’ (link below).

If a creditor has contacted you about a debt you think you do not owe, or if you disagree with the amount being claimed, you have a right to dispute the debt or the amount of the debt. See 'Disputing a debt' (link below).

More information

Being sued

Deciding whether you owe the debt

Disputing a debt

Related publications

Debt problems: the law, your options

Weighing it up

Related websites

Consumer Credit Code

How we can help

Call Victoria Legal Aid’s (VLA) Legal Information Service for free information over the phone about the law and how we can help you with your legal problem. You can speak to a legal information officer in English or ask for an interpreter. Phone (03) 9269 0120 or 1800 677 402 (country callers), Monday to Friday from 8.45 am to 5.15 pm.
VLA’s other free legal services include:

  • advice at VLA offices and other locations across Victoria
  • lawyers who are on ‘duty’ to help at many courts and tribunals.

For some matters we can provide you with a lawyer to help you run your case.

To find out more about any of our legal services see What we do.

Who else can help?

See Getting help with financial problems for details of free financial counselling services in your area and other organisations that can help you.