Are you stuck with clients who are not fulfilling their obligations to pay back their debts? There is hardly anything more annoying than a client or a customer not paying their credits. You try your best to get the money back from your customers, implement every method you can only to feel hopeless. What else can you do? Suing the customer or the client for non-payment of dues should be your last resort.
This may mean that you need to hire a professional to see whether you need to take legal action. There are many credit collection services that will help you explore several ways of procuring account receivables from your clients.
Here are things that you need to explore before you sue a customer
6 Things to Check Before You Finally Take the Decision of Suing Your Customer or Client
- Carefully review the contract that you have with the client
- Make sure that your client cannot blame you for anything
- Attempt to resolve the mess in an informal manner
- Check all the documents before you file a lawsuit
You need to check if you have all the documentations that show the clients’ inability topay. You also need to make sure there is no evidence of your inability to comply with the agreement that hurts the clients’ expectations. You need to gather evidence to falsify every untrue or maliciously made statements in the contract that can harm your business.
You need to go through every document and understand what impact the lawsuit will have on your business. If your customer owes you a high amount then a lawsuit is probably the way to go. But if you feel that the claim will make you spend more than the actual account receivables, then you should definitely stay away from suing the customer.
- Give your clients a final chance to clear their dues before filing a lawsuit
- Prevention of further damage
Before accusing your customer for not paying the dues within time, make sure you read the contract to understand the things fully and not miss any point. Are you sure the client has broken his end of the agreement? Some contracts have provisions of resolutions of any dispute that might arise and where they must be resolved.
As one of the professional credit collection services your management and performance has to be flawless and should not have any loopholes that the client might use against you. You have to be very careful and make sure that your customer does not get a chance to counterclaim against you. Did you properly carry out your part of the deal? Did your client raise any concern that remained unresolved from your end? By asking these questions to yourself, you can avoid counterclaims from your client’s end.
You can try to resolve the situation between you and your client informally once before you go legal. Informal resolutions might not benefit you eventually, but you can save the cost and time that is involved in a legal dispute. You can step into your client’s shoes and try to find out why they are violating the agreement and not paying you.
Maybe there is a lack of communication between the two of you. Maybe the client has some genuine issues which is not getting your attention for a long time. Maybe your client lacks the ability to pay you back, if that is so then you need to show some effort and empathy and discuss and chalk out a more relaxed payment plan. You can search for credit collection services in Houston to know how to proceed with your unresolved debts. That way you will also build a good relation with your clients. Nelson, Cooper & Ortiz, LLC. is a credit collection company you can trust to assist you in such situations.
You can send your client a legal notice. This is sometimes enough to make them pay the dues. You can also perform a final follow up with your customer by resending invoices with a copy of the agreement.
If these steps don’t work, you can try one last thing to lure the customer to pay a discounted amount as a one-time offer. You can hire an attorney to assist you in this process or you can choose the best commercial collection agency to do all the work on your behalf.
The last thing that you would want to deal with after a bad paying client is another bad payer. Whether you went through a lawsuit or not with your last client, you need to make sure that all the employees of your company stay on the same page when such a situation occurs again. You need to go through a thorough background check before you enter a deal with a new client.
Follow these steps to stay away from legal turmoil by assessing the risks and loopholes before you decide to take legal action on your customer or client, because once you go that way, there is no coming back.
