There are five important elements to include in a legal document to show money owed: the amount of money owed, who owes the money, who the money is owed to (and/or why the debt was created), the date the debt was created and the date it is expected to be repaid. With those elements, plus proof that the debt actually exists, it is possible to establish the legal right to collect a debt.
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Things you need
- Amount of money owed
- Reason for debt
- Date the debt was created
- Date the debt is expected to be repaid
- Proof of debt
Write the full legal name of the person who owes the money and the full legal name of the person to whom the money is owed.
List the amount of money owed. Include the purpose for which the money is owed, if applicable. Include the date that the debt was created.
State the date and method that the debt is expected to be paid. If repayment is to be made in instalments, list the date and amount of each instalment payment.
Obtain the signature of the person who owes the debt on the legal document for money owed. This is critical. The person to whom the debt is owed should also sign the document, but this is less critical. The signature of the person who owes the debt is necessary to establish proof of the debt.
Tips and warnings
- If you are owed money, you may sue to recover the debt. However, without proof, you have little recourse. Also, the law usually limits the maximum time you can wait to file a lawsuit. Check the laws in your particular jurisdiction.
- If you are the (alleged) debtor, but dispute the debt for any reason, you may request the creditor to produce proof of the debt, which establishes that the debt is legitimate and that making the payments demanded to the party demanding payment will settle the debt.
- If the person who owes the debt won't sign the document for money owed, write it and sign it yourself. You will also need to provide evidence to prove the existence and legitimacy of the debt, such as a cancelled check or electronic transfer receipt. Attach the proof of debt to the legal document. Send a copy of the signed document with attached proof to the debtor by certified mail.
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