Can You Ignore a Letter of Demand? Legal Consequences in Singapore

Receiving a letter of demand can be intimidating, especially if it lands in your inbox unexpectedly. Whether it’s over unpaid invoices, tenancy disputes, or contractual disagreements, it’s natural to feel overwhelmed or unsure of how to respond. One common reaction is to ignore the letter in the hopes that the problem will go away.

But in Singapore, ignoring a letter of demand can lead to serious legal consequences. While a letter of demand itself is not a court order, it is often the first formal step before legal proceedings begin. This article explains what a letter of demand is, what happens if you ignore it, and what your best course of action should be.

Is a Letter of Demand Legally Binding?

Let’s start with a common misconception. A letter of demand (LOD), also known as a demand letter is not legally binding in and of itself. It is not a court judgment, nor does it compel you to take action immediately under the force of law.

However, a LOD is a formal notice from the claimant (often via their lawyer or a debt recovery agency), stating their intention to pursue legal action if the dispute is not resolved. In many cases, it is used to document a good-faith effort to resolve the issue amicably before heading to court. If the matter proceeds to litigation, the letter and your response, or lack thereof, may be used as evidence.

What Happens If You Ignore a Letter of Demand?

While you're not legally required to respond to a letter of demand, choosing to ignore it can open the door to far more complicated, and costly, consequences.

Risk of Legal Action

If you fail to reply, the sender may initiate legal proceedings against you. The nature of the legal process depends on the value and type of the dispute. For smaller claims (typically S$20,000 or less, or up to S$30,000 with mutual agreement), the matter could go before the Small Claims Tribunals. For larger or more complex issues, the case may be escalated to civil courts.

The longer you wait, the fewer options you may have to negotiate or resolve the issue on your terms.

Default Judgment

If you ignore both the demand letter and a court summons, the claimant may apply for a default judgment. This means the court may rule in the claimant's favour simply because you did not defend yourself. Once a default judgment is granted, the claimant can take enforcement actions such as:

• Garnishing your wages or bank account

• Seizing personal or business assets

• Filing for bankruptcy (in cases of large unpaid debts)
  
  

This can all happen without your active participation, simply because you failed to respond.

Damage to Reputation or Credit Standing

If the dispute becomes public, it could harm your professional credibility or business reputation. For companies, this might affect relationships with suppliers, clients, and partners. For individuals, especially in financial or legal professions, it could even impact your creditworthiness if legal action is recorded in public databases.

Should You Always Respond to a Letter of Demand?

In short, yes. Even if you strongly disagree with the claims made in the letter, it’s crucial to respond and address the issue directly. By staying silent, you risk being seen as uncooperative or liable.

Depending on the situation, your response may involve:

• Disputing the claim with evidence (e.g., receipts, contracts, emails)

• Negotiating a settlement or proposing a payment plan

• Engaging a lawyer to draft a formal reply on your behalf
  
  

Timely communication can help prevent misunderstandings and may even resolve the matter without going to court.

What To Do If You Receive a Letter of Demand

If you've received a letter of demand, here’s how you should proceed:

1. Read it carefully: Understand what is being demanded, who is making the claim, and what the deadline for response is.

2. Check the facts: Review the allegations and compare them against your records.

3. Gather supporting documents: Contracts, invoices, communication logs, anything that helps your case.

4. Seek legal advice: Especially for high-value or complex matters, consulting a legal professional ensures you don’t say or do something that can be used against you later.

5. Respond in writing: Whether you're accepting, disputing, or seeking clarification, document your reply professionally.

Even if you feel that the sender is being unreasonable, do not respond emotionally or with hostility. A well-crafted, calm response may defuse the situation, or at least give you a stronger standing if things escalate.

Conclusion

While a letter of demand may not carry the force of law, ignoring it in Singapore can lead to real and significant consequences, from court proceedings and default judgments to potential damage to your reputation or business.

If you’ve received a letter of demand, take it seriously. Respond thoughtfully and consider seeking professional help to protect your interests. And if you’re the one who needs to send a letter of demand, engaging a reliable letter of demand service provider in Singapore can ensure it’s drafted properly and in line with Singaporean legal standards.