Key facts
- A letter of demand states the amount owed, what it is for, and a deadline to pay
- Deadlines of 7 to 14 days are common; give a specific date
- You can send one yourself, through a lawyer, or through a licensed debt collection company
- It must not threaten, harass, or claim a court case has started when it has not
What a letter of demand should include
- Your name or company name, and the debtor’s name, company name and UEN
- The exact amount owed, with the invoice numbers and dates it comes from
- What the amount is for: the goods, services, or loan behind it
- A clear deadline to pay, commonly 7 to 14 days from the date of the letter
- How to pay: bank details or PayNow, and who to contact
- What will happen if the debt is not paid by the deadline
- The date, and the signature of the sender
Who can send one
You can write and send a letter of demand yourself. A lawyer can send one on your behalf, and so can a debt collection company. Since 1 March 2024, any company that collects debts for others in Singapore must hold a licence from the Singapore Police Force under the Debt Collection Act 2022.
A letter from a third party usually carries more weight than another reminder from you, because it shows the debtor the matter has moved beyond a routine follow up.
What a letter of demand must not do
It must not threaten violence, harass, or make claims that are not true, such as saying a court case has been filed when it has not. Threatening or harassing a debtor can be an offence under Singapore law, including the Protection from Harassment Act 2014, whoever is collecting. A firm, factual letter works better anyway.
What happens after you send it
- The debtor paysThe most common outcome for a debtor who can pay but has been putting it off.
- The debtor asks for timeAgree an instalment plan in writing. A written acknowledgment of the debt, or any part payment, restarts the six year limitation period for a contract debt.
- The debtor disputes the amountAsk for the reasons in writing and check them against your records before deciding the next step.
- The debtor ignores itEscalate: a collection company follows up in person and by phone, or you move to the Small Claims Tribunals or court. For an undisputed debt over S$15,000 owed by a company, a lawyer can serve a statutory demand, which gives the company 21 days to pay.
Your options if the letter is ignored
| Route | Who it suits | Limits | Cost to you |
|---|---|---|---|
| Debt collection company | A debtor who can pay but keeps delaying, or has gone quiet | Must hold a Police licence. Cannot take court action for you | Speedy: a commission on what is recovered. No recovery, no fee |
| Small Claims Tribunals | Disputes over goods or services, where you can represent yourself | Up to S$20,000, or S$30,000 if both sides sign a Memorandum of Consent. No lawyers | Filing fees. An order still has to be enforced if the debtor ignores it |
| Magistrate's Court | Larger claims, usually with a lawyer | Up to S$60,000 | Legal fees, usually paid whether or not you recover |
| District Court | Larger commercial claims, with a lawyer | Up to S$250,000 | Legal fees, usually paid whether or not you recover |
| Statutory demand (company debtor) | An undisputed debt owed by a company | Debt over S$15,000. The company has 21 days to pay before it can be presumed unable to pay its debts | Usually prepared by a lawyer |