In the Philippine legal setting, a Demand Letter is more than just a formal request for payment; it is a critical evidentiary requirement. Before you can file a case for collection of a sum of money in court, you must first prove that the debtor has defaulted on their obligation.

Under Article 1169 of the Civil Code of the Philippines, "those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation."

Here is a comprehensive guide on how to craft an effective demand letter within the Philippine context.

1. Why a Demand Letter is Essential

While it might seem like just another piece of paper, a demand letter serves three vital functions:

Establishing "Default" (Mora): Generally, without a demand, the debtor is not legally considered in "delay," even if the due date has passed.
Condition Precedent: Most Philippine courts (especially in Small Claims) require proof that a demand was made and refused before they will even entertain your complaint.
Evidence of Good Faith: It shows the court that you attempted to resolve the matter amicably before resorting to litigation.

2. Key Elements of an Effective Demand Letter

To be legally sound, your letter should be professional, firm, and contain the following specifics:

The Parties: Clearly identify the Creditor (you) and the Debtor.
The Debt Details: State the exact amount owed, the date the obligation was created (e.g., via a Promissory Note or Invoice), and the original due date.
The Deadline: Give a specific period (usually 5 to 15 days) from receipt of the letter for them to pay.
The Warning: State clearly that failure to pay will result in legal action (Civil or Criminal, depending on the circumstances, like B.P. 22 for bounced checks).
Proof of Service: Ensure you send it via Registered Mail with Return Card or through a private courier (like LBC or J&S) so you have a tracking number and proof of receipt.

3. Practical Template (Philippine Context)

[Date] [Debtor's Full Name] [Debtor's Address] RE: FINAL DEMAND FOR PAYMENT OF [AMOUNT IN PESOS] Dear Mr./Ms. [Last Name], This letter serves as a formal demand for the payment of the sum of [Amount in Words] (PHP 000.00), representing your outstanding obligation to the undersigned which became due and demandable on [Original Due Date]. Despite several verbal reminders and follow-ups, the said amount remains unpaid. This debt arose from [State the reason: e.g., a loan granted on Date / unpaid invoices for goods delivered], as evidenced by the attached [mention document: e.g., Promissory Note / Acknowledgement Receipt]. FINAL DEMAND is hereby made upon you to settle the full amount of PHP [Amount] within [Number, e.g., Seven (7)] days from receipt of this letter. Should you fail to settle this obligation within the period provided, I shall be constrained to endorse this matter to legal counsel to initiate the appropriate Civil and/or Criminal actions (including but not limited to a case for Small Claims or violation of B.P. 22, if applicable) against you to protect my interests. This will include claims for interests, attorney's fees, and costs of litigation. We trust that you will give this matter your immediate attention to avoid the inconvenience and expense of a full-blown legal proceeding. Please remit payment via [State Payment Method: e.g., Bank Transfer to Account No. XXXX / Cash]. Sincerely, [Your Signature] [Your Printed Name] [Your Contact Number]

4. Important Tips for Success

Attach Proof: Always attach a photocopy of the Promissory Note, Invoice, or Bounced Check. Never send the originals.
Small Claims Court: If the debt is PHP 1,000,000 or less, you can eventually file a "Small Claims" case in the Metropolitan or Municipal Trial Court. In Small Claims, lawyers are not allowed to represent parties, making it a fast and affordable option.
Barangay Conciliation: If you and the debtor live in the same city or municipality, the law generally requires you to go through the Barangay Lupon first before filing in court. Your demand letter can serve as a basis for the Barangay Captain to summon the debtor.
Demand via Lawyer: While you can write this yourself, a letter printed on a law firm's letterhead often carries more weight and shows the debtor you are serious about suing.

Would you like me to draft a specific version of this letter tailored to a particular situation, such as a bounced check or unpaid rent?