Top 10 Tips to Know When To Take Your Client to Court

Posted by Ryan Howard on Sep 26, 2019 10:22:46 AM

Know When To Take Your Client to Court

When you're running a business, especially a business that works with other businesses, you know the hard fought battle that it takes to build a long-standing relationship. You have to earn the trust of your client so they know that your products or services are available to help their business be better. That relationship can turn sour if you've committed to your agreement and they're not paying you for it.  Instead of taking it personally, it may be time to litigate.

Top 10 Tips to Know When To Take Your Client to Court.

commercial litigation

Your client is not responding.

If you've been reaching out for 90 - 120 days or more, sent plenty of friendly reminders, and still haven't received a single response from your client, they may be avoiding you for a reason.

Your client is refusing to pay.

Some clients will outright tell you that they're not going to pay. They may express dissatisfaction in the product or service and don't feel obligated to pay you for it.

You've heard they're going under.

You've heard through the grapevine or online that the company is going out of business or has filed bankruptcy proceedings. If this is the case, it's time to build your case.

Your relationship is over.

Maybe you started off with an instant connection and felt immediately like you were meant to work together. Something changed along the way and now your once steady business crush is over. If you've parted ways and they still haven't paid, you'll want to take them to court.

You have a signed contract or agreement.

A signed agreement will prove that you agreed to do your part and they agreed to pay for it. This is very important for building a case against them.

You have documentation of correspondence.

You've reached out numerous times. You've sent the invoice again and again, reminding them that it's past due. You've kept records of phone calls and other communication.

Debt collections isn't working.

Not only did your in house collections department attempt to resolve the issue, a third party has tried as well. If collections efforts haven't successfully worked to bring the account current, it's time to litigate.

The balance warrants the time involved.

Going to court may be a lengthy and costly process. If the client owes a substantial amount, then it certainly warrants taking it to the next level. 

Legal counsel has reviewed the case.

When the case is reviewed by legal counsel, the following will be determined:

  • any documentation available to support your case
  • legal jurisdiction for the case
  • if the debt and lawyer fees are collectible
  • if the client is in bankruptcy or otherwise unable to pay

You understand that you don't pay unless your team wins the case.

 Taking a client to court can be filled with dread and anxiety. If you know that costs your business nothing unless you win, it can relieve some of that stress. When litigating against a client, the rate that's paid to the legal team is negotiable on a case by case basis.

As your collections company, Enterprise Recovery will review your case, find a local attorney and negotiate their rate. The lawyer will determine if the case has a chance of winning and the legal team gets a percentage of what's recovered only if the amount is collectible. 

Considering taking your client to court for non-payment?Talk to us and we can help!


Topics: Business relationships, Commercial Debt Collection