Credit Term

LOD

Letter of Demand

A formal written demand — usually from a creditor's lawyer — requiring you to pay an overdue debt by a stated date, and warning that legal action may follow if you do not. It is a serious step, but it is not a court judgment.

A letter of demand sets out the amount owed, gives you a deadline to pay (often 14 to 21 days), and states that the creditor may sue if you ignore it. Receiving one means the matter has escalated, but it is a demand, not a verdict: no court has yet ordered you to pay, and you still have room to respond, negotiate, or dispute the amount if it is wrong.

The worst thing to do is ignore it. If the debt is genuine, contact the creditor to arrange payment or a plan; if it is disputed or you are unsure, seek advice promptly, and consider whether it might even be statute-barred. Responding calmly and on time can often prevent the next, costlier step. Keep copies of everything and get any agreement in writing.

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