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Default Demand Letter for Canada

Default Demand Letter Template for Canada

A Default Demand Letter is a formal written notice sent to a debtor in Canada who has failed to meet their payment obligations. The document serves as an official notification of default and demands payment of the outstanding amount within a specified timeframe. It must comply with Canadian federal and provincial regulations, including specific requirements for interest rate disclosure, collection practices, and consumer protection laws. The letter typically includes detailed information about the debt, payment history, calculation of amounts owing, and clear instructions for payment, while outlining potential legal consequences of non-payment.

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What is a Default Demand Letter?

A Default Demand Letter is a crucial document in the debt collection process within the Canadian legal framework. It is typically used when a debtor has failed to meet their payment obligations and the creditor wishes to formally demand payment before pursuing legal action. The document must comply with various Canadian federal and provincial regulations, including the Interest Act, Collection and Debt Settlement Services Act, and relevant consumer protection legislation. The letter serves multiple purposes: it formally documents the default, provides a clear deadline for payment, and satisfies legal requirements for providing notice before initiating court proceedings. It should include specific details about the debt, including the original agreement, payment history, interest calculations, and any relevant security interests. The document is particularly important as it often serves as evidence in subsequent legal proceedings and demonstrates the creditor's reasonable attempts to collect the debt before escalating to litigation.

What sections should be included in a Default Demand Letter?

1. Sender Details: Full legal name and contact information of the creditor or their representative

2. Date: Current date of the demand letter

3. Recipient Details: Full legal name and address of the debtor

4. Re: Line: Brief subject line identifying the debt or account number

5. Debt Details: Clear statement of the total amount owed, including principal, interest, and any additional charges

6. Default Description: Explanation of how the default occurred and reference to the original agreement

7. Demand Statement: Formal demand for payment, including the exact amount and deadline

8. Payment Instructions: Clear instructions on how and where to make the payment

9. Consequences: Statement of potential legal action if payment is not received by the deadline

10. Closing: Formal closing, signature block, and creditor's contact information

What sections are optional to include in a Default Demand Letter?

1. Previous Communications: Reference to prior attempts to collect the debt or previous correspondence

2. Security Interest: Details of any security interest or collateral related to the debt

3. Payment History: Summary of payments made and missed payments, used for complex payment histories

4. Settlement Options: Proposed payment arrangements or settlement options, if the creditor wishes to offer alternatives

5. Interest Calculation: Detailed breakdown of how interest has been calculated, particularly for complex or long-standing debts

6. Third Party Authorization: Information about debt collection agency or legal representative if applicable

What schedules should be included in a Default Demand Letter?

1. Schedule A - Payment History: Detailed listing of all payments made and missed, with dates and amounts

2. Schedule B - Interest Calculations: Detailed breakdown of interest calculations and charges

3. Schedule C - Original Agreement: Copy of the original agreement or relevant sections thereof

4. Schedule D - Previous Correspondence: Copies of relevant previous correspondence regarding the debt

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Ƶ

Document Type

Demand Letter

Cost

Free to use
Relevant legal definitions
























Clauses




















Relevant Industries

Banking

Financial Services

Real Estate

Construction

Retail

Manufacturing

Professional Services

Healthcare

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Relevant Teams

Legal

Finance

Accounts Receivable

Collections

Credit Control

Risk Management

Treasury

Corporate Affairs

Administrative Support

Compliance

Relevant Roles

Credit Manager

Collections Officer

Accounts Receivable Manager

Financial Controller

Legal Counsel

Credit Analyst

Collections Specialist

Finance Director

Treasury Manager

Risk Manager

Corporate Lawyer

Debt Recovery Specialist

Chief Financial Officer

Accounts Manager

Legal Administrator

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