A 5-Day Demand Letter for Payment is an official notice sent to a debtor as a final request to pay a due debt before legal action is taken. It is often only used when you have sent the debtor multiple reminders about the debt in the past with no results. As the name suggests, the timeframe for this request is no more than 5 days, after which you can take action against the recipient.
Most states require that you first try to recover a debt through other means before filing a lawsuit against the debtor or going to small claims court. A demand letter for payment is a final, non-confrontational means of recovering your money.
When Should You Send a 5-Day Demand Letter?
Many jurisdictions require that you explore other options of retrieving your debt before turning to the legal system. One of the most commonly used and effective methods of doing this is sending your debtor a demand letter, notifying them that the debt is due. Some of the situations where a 5-day demand letter may come in handy include when:
- Requesting unpaid utility bills
- Requesting overdue loan payments
- Requesting payment for purchased goods or services from a customer
- Obtaining overdue application or membership fees
What to Include in a 5-Day Demand Letter
A 5-Day Demand Letter for Payment presents the reader with a short window within which they must pay your debt. This means that you don’t have room for a lot of back and forth, which often comes from ineffective communication. To ensure the reader gets all the tools they need to process your request, ensure your letter contains the following key elements:
- The name and addresses of the debtor and the person owed the debt
- Relevant dates, including the date the service or products were delivered, and when the debt was incurred
- Details of the debt, such as nature, amount, and any breach of contract
- Information or any prior attempts to collect the debt, including dates
- Your clear expectations for payment
- An exact deadline
- The possible consequences for non-payment
- Your contact information
Serving a 5-Day Demand Letter for Payment
Serving a demand letter is a 4-step process that includes drafting and delivering it to the relevant party. Use this checklist to ensure you serve your letter properly:
- Always include the debt amount and due date
- Allow the debtor 5 days to cure the debt
- Mention the consequences of non-payment and offer an alternative the debtor can use to avoid them
- Send your letter through certified mail
5-Day Demand Letter for Payment (Format)
{Date}
{Debtor’s Name}
{Debtor’s Company Name}
{Debtor’s Company Address}
{City, State, Zip Code}
Re: Past Due – Please Pay Upon Receipt
Dear {Mr./Mrs./Ms. Last Name},
On {date} I delivered {mention goods or services provided} at your request, with the promise that you will pay {company name} a sum of {mention due amount} by {due date}. Despite my efforts to recover this amount on {insert dates when you requested payment in writing}, you have not responded.
I am writing to request that you pay the due amount to {account number} within the next 5 days. Failure to meet this demand will automatically lead to {mention the consequences for non-payment}.
If you have any questions regarding this matter, contact me at {contact information}.
Prompt attention to this issue will be appreciated.
Sincerely,
{Your Name}
{Your Signature}
Sample – 5 Day Demand Letter for Payment
21 February 2031
Harrison Powell
109 Kite Lane Street
Orlando, FL 09900
Re: Pay Upon Receipt
Dear Mr. Powell,
I installed a new asphalt shingle roof on your house, home address 109 Kite Lane Street, on 1 January 2031, for which you were supposed to pay me an installation and labor fee of $7,000 by 15 January 2031. I sent you two demand letters informing you that your payment was due on 20th January and 10 February, but you have not responded.
As per our agreement, your payment is now way overdue. Please consider this the last request for payment from my office and act on it by crediting the amount to ACMK009 within the next 5 days.
Should you fail to make the payment within the stipulated timeframe, I will be forced to file a lawsuit against you in court. You can contact me at mellisaking@email.com before then, if you have any queries.
Sincerely,
Melissa King
5-Day Demand Letter for Payment (Word Template)
Bottom Line
The most effective 5-Day Demand Letter for Payment provides the debtor with details of the debt owed as well as how and when they should pay it. It also stipulates the actions you will take if the debt is not paid by the time the 5 day-timeline lapses.
