Cunningham Swaim, LLP - Business

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DALLAS: 214-646-1495
PASADENA: 626-765-3000
DENVER: 303-309-8167
PAGOSA SPRINGS: 970-884-3511
HOUSTON: 713-668-0610
NEW YORK: 917-538-2774


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Your options for non-paying clients

Your options for non-paying clients

On Behalf of | Nov 30, 2022 | Business Litigation |

If you are lucky, your business will have many long-term, reliable clients. Unfortunately, not all clients will fit this description. 

When you have a client who refuses to pay, you have a few options. Learning the options you have can help you handle the situation. Here are the steps you can take:

Consider your position and options

Before pursuing a client for non-payment, you should consider if it is worth it. For example, if they have a small invoice, it may be best for your business to write it off and refuse to do business with them in the future. Remember, even if your case is successful, the client may file bankruptcy, and you will still have to pay court and lawyer fees, leaving you further in the red. 

Follow up with the client

Before jumping to conclusions about a non-paying client, send a reminder. Sometimes invoices are lost or forgotten. Send a friendly reminder of the payment that is due and wait for a response. 

If the client does not respond or flat-out refuses to pay, and it is worth your time and effort, you can involve third parties. At this point, learning your legal options is recommended. 

Exercise your legal rights

If you decide to take action against a non-paying client, you should send them a letter of intent. This lets the client know you are planning to take legal action. Sometimes, this is enough to get them to pay. In other cases, moving forward with actual litigation will be necessary to get the payment you are owed. 

A good way to protect yourself when it comes to clients is to research them before doing business and to have a clear and concise contract that all parties sign. Even with this, though, issues can arise. Knowing your legal rights to pursue the payment will help you take the right steps. 

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