You are here:
- Home
- Business
- Small Business Information
- Business Debt
- Client won't pay
Business Debt/Client won't pay
Advertisement
Question
QUESTION: I have a client who paid me half the fee in a timely way. But the second half, $5,000, is now several months late. I have a signed Letter of Agreement from her. I even offered for her to pay in installments. I have called, emailed.. Each time she says, I'm sending you a check this week, but it doesn't happen. She lives in a different state (I am in NJ, she is in Indiana). What do I do now?
ANSWER: Jennifer,
Go to the post office and get one of the red, white and blue priority mail flat rate envelopes. Type up a collection notice to the customer, very short & to the point, telling her the balance due, what date you must receive this payment by and what you plan to do if you don't have the payment by that date. Be very specific by listing the amount, the exact date and what you will do. Things you can do would be take her to court, report the debt to her credit report or to the Better Business Bureau, or place her with a collection agency. Send the envelope with delivery confirmation.
This works 97% of the time. If she ignores this letter and still doesn't pay you, let me know and I will help further.
---------- FOLLOW-UP ----------
QUESTION: Thanks for the speedy reply.
How do I take her to court when we are in different states? Would she be required to come to NJ?
ANSWER: Jennifer,
If you have a signed letter of agreement or a signed contract, you would take her to court in the venue where the contract was signed. If she came to your office and signed, it would be in your state. If you went to her and she signed, it would be in her state. If you faxed her the contract and she signed it and faxed it back, you may be able to sue in your state. Check with www.lawdog.com and/or a local attorney, or you can even call your local courthouse and ask the clerk of courts.
Good luck.
---------- FOLLOW-UP ----------
QUESTION: My client is one of the 3%. I did as you suggested and no response. I have a signed Letter of Agreement, but it was executed by MAIL. I signed in New Jersey, she signed in Indiana. Suggestions for what I should do next?
Thanks.
Best,
Jennifer
Jennifer,
If you have a signed letter of agreement and they did not respond to your demand letter, I would suggest placing the account with a third party collection agency or taking them to small claims court depending on the amount owed. The agency will need a copy of the signed letter of agreement, as well as a copy of any correspondence, payment history and the delivery confirmation from the last letter you sent by priority mail and I would suggest getting an agency in Indiana. make sure when you choose an agency that you ask for references, and check with the Better Business Bureau as well as asking if they are a member of any trade organizations that you can call for a reference, also ask if they are a member of their local Chamber for a reference.
Good luck!
Related Articles
Answers by Expert:
Michelle Dunn
Expertise
As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.
Experience
I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com
Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.
Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.
Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.
Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.
©2012 About.com, a part of The New York Times Company. All rights reserved.