A demand letter is often the most important step in debt recovery. Done well, it resolves the matter without legal action. Done poorly, it damages relationships or worse, undermines your legal position.
Here’s how to write a demand letter that gets results in the Kenyan context.
What a demand letter does
A demand letter formally tells a debtor: you owe this amount, it’s overdue, and here’s what happens if you don’t pay. It creates a clear record, demonstrates seriousness, and often prompts payment from customers who were simply deprioritising you.
What to include
1. Your details and the debtor’s details
Letterhead, date, and the debtor’s full name and address. Address it to the right person where possible.
2. A clear statement of the debt
State the invoice number(s), the amount owed, the original due date, and how many days overdue the account now is. Be specific — vagueness weakens your position.
3. A brief, factual background
One or two sentences on what the debt is for (goods delivered, services rendered). Keep it factual, not emotional.
4. A clear demand and deadline
State exactly what you want: full payment by a specific date (typically 7–14 days from receipt). Avoid open-ended language like “at your earliest convenience.”
5. The consequences of non-payment
Explain what happens next if payment isn’t made, escalation to a recovery partner, field recovery, or legal coordination. Be accurate; don’t make threats you can’t or won’t carry out.
6. Payment instructions
Make it easy to pay. Include bank details, M-Pesa paybill, and a contact for questions.
What to avoid
- Aggressive or threatening language. It’s unnecessary and can cross legal lines. Professional and firm always outperforms hostile.
- Inaccurate amounts. Verify the figure before you send. An incorrect demand weakens credibility.
- No deadline. Without a date, there’s no urgency and no clear point to escalate.
- Unsubstantiated claims. Have your invoices and correspondence ready in case of dispute.
A note on compliance
Recovery activity in Kenya must respect the Data Protection Act (2019) and avoid harassment. A professional demand letter is well within these boundaries, and far more effective than repeated, unstructured calls.
The takeaway
A demand letter isn’t about intimidation; it’s about clarity. State the facts, set a deadline, and outline the next step. Most debts that can be resolved without legal action are resolved at this stage.
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