Entrepreneurs are always going to experience clients who refuse to pay eventually. They may be aggressive or they may simply try to ignore all correspondence with you. Either way, entrepreneurs should take their clients to court for nonpayment in most cases.
These are some of the reasons why entrepreneurs should consider taking legal action to get their money.
That’s Your Money
Remember that any clients who don’t pay are taking money directly out of your pocket. You dedicated time and resources to carrying out your work, so the loss is much bigger than the bill was if you let it go. Of course, you wouldn’t waste your time suing over $10, but even if the debt is as low as a few hundred dollars those nonpayment scenarios can really start to add up.
You Don’t Always Need an Attorney
The biggest reason entrepreneurs don’t sue is they don’t have the money to pay for the legal fees, or the legal fees would be much higher than the amount being sued for. The truth is that some states even ban entrepreneurs from being represented by attorneys in small claims court.
You should hire an attorney if it’s financially viable, however. They make everything easier by doing all the leg work and they increase your chances of you getting your money back.
Because You’re Helping the Community
Think about what letting a client get away with it could mean for the wider business community. A client who gets away with ripping an entrepreneur off will believe they can do it repeatedly. And that will soon become the common practice because clients are seeing that their fellow clients are getting away with not paying. It all builds up and eventually letting things go can allow negative practices to become acceptable.
Help your fellow entrepreneur and make sure that they don’t get away with it.
Suing is Not as Expensive as You Think
Many attorneys will make you offers like you don’t have to pay unless they win your case. Offers like these are fantastic for entrepreneurs because it means they can take their clients to court for a low fee. You can even employ recently graduated lawyers who’re working their way up the ranks.
Do remember that choosing a lawyer isn’t a final decision. You can always change lawyers in the middle of a case if you aren’t happy with the service they’re providing you.
Because I Can’t Collect It Anyway
It’s true that entrepreneurs who sue the client will often be forced to deal with the collections process themselves. This is daunting and it convinces a lot of entrepreneurs that it’s not worth the hassle. But it’s easier than you think to hand the collections process over to an agency. They will handle things for you and take their fee out of the amount to be recovered.
It’s also true that you won’t get the full amount you were suing for after your various expenses are collected. But when you hand the case over to the professionals you’ll spend little time on collecting and you’ll still get some of your money back in the end.
Last Word – What You Need to Know About Suing Clients
It’s nowhere near as expensive or as arduous as you might think to sue clients for nonpayment. Look for representation, or at least some professional advice. They’ll walk you through the whole process and you’ll be able to recover some of what you lost, thus preserving much of your bottom line.
Have you ever had to sue a client for nonpayment?
