As every business owner learns sooner or later, some people don’t pay their bills. When faced with this situation, you must first decide if the relationship with your customer outweighs the amount due and how much time and effort you want to devote to collecting the money owed.If your relationship with your customer is still intact, you should call him directly and determine why your bill is not being paid. If it is merely a misunderstanding or miscommunication, you can best resolve it by open discussion directly.If, however, your relationship has deteriorated to the point that you no longer expect to do business with this customer and that the customer is acting unreasonably in refusing to settle their account, you must then determine whether to pursue collection and how to do so.Debts are always worth collecting as long as it doesn’t cost you more in time and money than they are worth. Generally speaking, the larger the debt, the more time and effort you will be willing to devote to try to collect it.If the debtor is willing to pay, collecting the money owed often requires nothing more than sending letters and making telephone calls requesting to be paid. If you do not wish to spend the time, or are uncomfortable asking the debtor to pay you, collection agencies will perform these tasks for you in exchange for a “contingency fee” where they retain a percentage of what they collect. If, however, the debtor is not willing to pay you voluntarily, sending letters and making telephone calls may be nothing more than a waste of time. You either write off the debt or you hire a lawyer.A common misconception is that it costs a lot of money to hire a lawyer to collect a debt. Unlike litigation attorneys who charge an hourly rate regardless of the outcome, most collection attorneys charge a “contingency fee”, much like the collection agencies. Like the collection agencies, they too will write letters and make telephone calls; except that their message to the debtor will be that a lawsuit will be commenced if the debt is not paid. Unlike the hourly rates of the litigation attorneys, however, the debt collection lawyer is only paid if he actually collects money owed.In addition to the method of payment, there is another distinction that is vital to consider when selecting a debt collection attorney. While most lawyers will be able to file a lawsuit and obtain a judgment, (a determination by a court that the defendant is indebted to the plaintiff for the amount specified), only a debt collection attorney with advanced technology and computer software will have the tools necessary to locate assets or employment in order to enforce the judgment. Once these assets or employment are located, the debtor’s salary can be garnished, their bank accounts seized, and their property sold and liquidated.In conclusion, once you decide to collect what is due, you can call and ask for payment, you can hire a collection agency to call and write letters for you, you can hire a litigation attorney and pay them to sue or you can hire an experienced debt collection attorney to obtain and enforce a judgment in exchange for a percentage of what they are able to collect.
