For small businesses to startup, it will often happen that some of the customers might purchase with a promise of a later payment. This is a good way to build a trustworthy customer base, but sometimes, it can be damaging to the business when people do not pay up on time.
What is to be done in such cases? When debt needs collection, it is required to avoid violent confrontations and use tactics that allow you and the payee to solve the problem with a good settlement. Bosserman Law small business attorneys are available to help small business owners recollect their owed debt and keep their business functioning in harmony.
What To Do When Your Clients Have Unpaid Invoices?
Send a Demand Letter
Before hiring a collection agency, ask your attorney to draft up a demand letter for the payable amount to your company.
Lawyer up or Hire a Collection Agency
When the above fails, you can try revisiting your contract to try and persuade the client with an arbitration clause, if you don’t have the arbitration clause, you should pursue this through legal procedures. Bosserman Law can guide you through what measures there are to be taken to reclaim the money that your client owes you.
You can also consider hiring a collection agency. There are a number of things to consider when hiring a collection agency. First of all, you should ask the people you trust and know to point you in the right direction. Getting a collection agency that has dealt with similar cases as your own business can be helpful, as they know how to approach such cases better than the business owners themselves.
Collection Agency Procedures
There are two ways the collection agencies work:
They can work with you to help recover the debt that the customer’s owe you, for a retainer of course, normally 30% of the owed debt or the company can buy the debt from you for a lower price and can help you get rid of the client instantly. This depends on the business owner as to how they want to approach the situation, they can put in the effort and fight for the debt or just let the company sort it out after selling it off.
Winning A Judgment
After you have won a judgment, and it still needs to be paid by a client who is in another state, you will need to hire a lawyer in the client’s state and enforce the judgment through legal means. Once again, you have the option of selling the debt to the collection agency and be done with it.
After winning the judgment, it is possible that the Agency’s price for buying the debt would be higher than if you were trying to sell the debt without settlement.
Consultation with your attorney on this matter is the key and they can help you make the better decision when considering selling your debt or not.
For further assistance in the matter, search for Bosserman Law in Southaven and get paid today.