When a client fails to pay an invoice or refuses to honour a payment agreement, many businesses in Singapore turn to a Letter of Demand (LOD) as the first formal step to recover the outstanding debt.
However, while a well-drafted LOD can prompt quick repayment, a poorly written or mishandled one can delay recovery, weaken your legal position, or even damage business relationships.
In this guide, we’ll cover the most common mistakes businesses make when sending a Letter of Demand — and how working with a licensed debt collector Singapore can help you avoid them.
A Letter of Demand is a formal written notice sent by a creditor to a debtor, requesting payment of an outstanding amount within a specified period (usually 7 to 14 days).
It serves as both a final reminder and a legal notice, stating that failure to pay may result in further action, such as engaging a debt collection agency or filing a legal claim.
Because it can form part of the evidence in court, an LOD must be clear, professional, and compliant with Singapore’s legal requirements.
Sending a well-structured LOD often helps businesses recover payment without going to court. It signals to the debtor that you are serious and prepared to take action.
But if drafted carelessly, it can create loopholes, weaken your credibility, or even cause the debtor to ignore your claim altogether. This is why understanding what not to do is just as important as knowing what to include.
One of the most basic but common mistakes is not specifying the full legal names of both the creditor and the debtor.
For example, using a trade name instead of the registered company name can lead to confusion or disputes later. The LOD should include:
This ensures there’s no ambiguity about who owes whom — a key point if the matter escalates legally.
Some businesses send a Letter of Demand without double-checking the exact debt amount. This is risky, especially if:
An inaccurate figure can make your claim look unprofessional or legally weak. Always include a clear breakdown of:
If there are discrepancies, clarify them upfront instead of leaving room for disputes.
A Letter of Demand should be firm yet professional — never hostile or intimidating. In Singapore, harassment or threats in debt recovery are illegal and can backfire badly on your business.
Avoid statements like:
“We will send collectors to your office until you pay.”
Instead, use lawful, neutral language such as:
“If payment is not received within 14 days, we reserve the right to pursue legal recovery or engage a licensed debt collector Singapore.”
This shows professionalism while protecting your legal standing.
An effective LOD must contain specific instructions and timelines. Failing to include a clear payment deadline or method of contact makes it easy for the debtor to delay or claim confusion.
Always include:
If your Letter of Demand refers to an invoice, purchase order, or contract — attach copies.
Without proof, the debtor can easily question the legitimacy of your claim or delay responding.
Include:
These attachments demonstrate that your claim is valid and documented.
Many businesses make the mistake of sending the LOD to a generic company email or an old address. This leads to “non-receipt” excuses.
Always verify:
If you’re unsure, a debt collector Singapore can help trace and confirm accurate contact information before sending the notice.
Sending an LOD is only the first step — follow-up is crucial.
Many businesses assume the letter alone will prompt repayment, but in reality, most debtors respond only after consistent reminders or calls.
Always:
If there’s still no response after the deadline, escalate promptly — either to a debt collection agency or legal counsel.
While it may seem simple to draft and send a Letter of Demand yourself, it’s easy to overlook key legal and procedural points.
A professionally written LOD from a licensed debt collector Singapore carries more authority and ensures compliance with Singapore’s legal standards.
Agencies like Swift Debt Recovery ensure your LOD is:
This approach increases your chances of recovering payment quickly while avoiding unnecessary conflict.
Delaying your response when a debtor defaults can make recovery harder. The longer you wait, the more likely the debtor is to:
Send the Letter of Demand as soon as payment becomes overdue — usually within 14 to 30 days of the missed payment date. Acting quickly demonstrates seriousness and keeps pressure on the debtor to resolve the issue.
A Letter of Demand is a serious document, but it doesn’t have to end a business relationship. The tone and approach you take can determine whether the client:
A licensed debt collector Singapore can act as a neutral third party, maintaining professionalism while achieving results — allowing both sides to preserve goodwill when possible.
Engaging a professional debt collection agency gives your LOD more weight and credibility.
Agencies like Swift Debt Recovery can:
In many cases, a professionally issued LOD resolves the matter before court involvement becomes necessary.
A Letter of Demand is often your best chance to recover payment before taking costly legal steps. But a poorly written or mishandled LOD can weaken your position and delay recovery.
By avoiding these common mistakes — and working with an experienced debt collector Singapore — you can protect your business interests, recover what’s rightfully yours, and maintain professionalism throughout the process.
If you’re unsure how to draft an effective LOD or need help managing stubborn debtors, reach out to Swift Debt Recovery for professional guidance and assistance.