If payment is still not made after reminders, perform a simple cost-benefit analysis where you determine whether the cost of the lawsuit is higher or lower than the amount of money you are asking your client to pay. For example, was the invoice sent on time and to the right contact? Has the scope of work been clearly defined and actually performed in a written or oral contract? Has the rate of pay for services been clearly defined? Was the payment method clear? Before taking formal legal action, it`s a good idea to send a final payment request to the customer. There is a good chance that the threat of legal action included in a final claim can convince the customer to finally pay his bill late. If not, the final payment request is important evidence in court that you made one last attempt to resolve the issue before suing your client. A final request for payment must be an official letter that includes: Proof of ownership in Texas is subject to Texas Property Code Section 24.0061 and Code of Civil Procedure 510. Both provisions provide that an applicant in an eviction action is entitled to be offered a warrant of possession allowing him to repossess the premises he has leased. If your unpaid bill is for office space, storage space or similar, our office can help you recover your belongings with a writ of possession. If both parties have entered into a contract and you have delivered what was required under the agreement, you have performed the work in good faith and are therefore entitled to payment. Whether the client has used the work or not is irrelevant. As a freelancer, taking legal action against a non-paying client can be a daunting prospect, but you shouldn`t be discouraged – you deserve to be paid for all the work you do. It`s natural to get frustrated when customers don`t pay, but often they`ve just forgotten. If you simply call these customers back or work with them to make payment easier, you can often bring your money.
However, after enough attempts to get payment, you may need to send the customer`s invoice to Inkasso, hire a factoring service, or take legal action. Read this guide if a customer refuses to pay and you`ll know exactly what to do. If you rely on cash and don`t know when a customer will pay, an invoice factoring service can help you get the money you need while you wait. With a factoring service, you sell your receivables to a company for a certain percentage of the account value (usually 70% to 90%). The service will then send you the money in a few days. Then the factoring service collects payments from your customers and sends you the rest of the money minus the service fee. In this expert guide, LawBite founder and president Clive Rich and attorney Belinda Naiken-Payne explain the legal process open to freelancers and small business owners when all other options are exhausted. Understanding your rights to take legal action for non-payment of bills is an important part of ensuring the viability of your business. Below is a helpful introduction to how the legal process can help you offset your losses. If your business works with a billing system, you may be familiar with late payments and maybe even non-payment. There are many reasons why customers don`t pay their bills on time (or not at all), including lost bills and unexpected additional costs.
To show the client “you are serious”, write a reminder letter, an official written letter describing the debt owed to you and indicating what the result will be if the debt is not paid by the due date. If you decide to take legal action, you will need to decide which court you want to sue in. Your first option is to file an application in Small Claims Court. Small Claims Court is generally the least cost-effective and time-consuming legal option for small businesses looking to collect debts. It is intended to resolve disputes quickly and the process is simple enough that most people do not hire a lawyer to represent them in Small Claims Court. You can only file an application in Small Claims Court if the amount owed to you is less than a certain amount. The maximum amount varies from state to state, but is generally between $2,500 and $25,000. If the client you are suing does not appear in Small Claims Court, you win the case by default. When they show up, the process is usually quick and simple and you get a verdict the same day. If a customer who doesn`t pay ignores your emails and calls, demand a firmer payment.
Service companies that are constantly working with the customer are best positioned to issue an ultimatum, Hoffmann said. Waldorf recommended requesting a payment schedule and following it until the customer pays. If necessary, send Renew your original contract and indicate that you will escalate the situation if invoices remain late. For some questions beyond that, you`ll need to assess whether the value of the claim is worth the associated legal fees.