Under Texas law, filing a lawsuit for non-payment of an invoice is essentially a lawsuit for “breach of contract.” The elements of a violation complaint are as follows: If more time has passed than you are willing to let without payment, you must send a reminder letter before proceeding. Although the legal letter for non-payment of the invoice precedes the lawsuit, you must be prepared to take legal action if necessary, and the final demand letter is likely to become an important piece of documentary evidence if you do. If you decide to take legal action, you will need to decide which court you want to sue in. Your first option is to file an application in Small Claims Court. Small Claims Court is generally the least cost-effective and time-consuming legal option for small businesses looking to collect debts. It is intended to resolve disputes quickly and the process is simple enough that most people do not hire a lawyer to represent them in Small Claims Court. You can only file an application in Small Claims Court if the amount owed to you is less than a certain amount. The maximum amount varies from state to state, but is generally between $2,500 and $25,000. If the client you are suing does not appear in Small Claims Court, you win the case by default. When they show up, the process is usually quick and simple and you get a verdict the same day. If you`re faced with a customer who doesn`t pay, you probably want a quick fix, but you don`t want to get a bad reputation that could scare off future customers.
Here, an experienced Houston attorney like Seth Kretzer can help you collect your unpaid bills through a variety of techniques. If the answer to all of these questions is yes and you haven`t been paid, the next step is to think about your relationship with the customer and what kind of “soft reminders” you can send to the customer to encourage payment. When you`re ready, you can work with your client to enter a payment plan for the unpaid invoice, where payments are made over several weeks or months. Created by FindLaw`s team of writers and legal writers| Last updated: 30. January 2017 A request to pay the full amount due on the invoice before a certain date “When I help clients who need to pay interest, late fees or lawyers` fees, I often ask the company in writing and signed by my client for something that will allow them to do so,” said Thomas J. Simeone. Litigator and Managing Partner at Simeone & Miller LLP. “If they cannot, I declare that interest and fees are not part of the contract and are therefore not allowed.” You should also be careful not to exceed the Law on Fair Debt Collection Practices, added Rumen Todorov, co-founder and COO of 411 Locals. The intervention of a legal assistant will help you avoid further difficulties. When determining damage, you must calculate unpaid invoices and, if the customer rented or purchased goods or equipment, whether they were damaged in any way.
If this is the case, you can factor in repair costs and possibly other damages due to loss of income from future rentals (this is more likely if you already have future leases). If you decide to take legal action for non-payment of bills, start the process with a formal letter of claim to the defendant, whether it is an individual or a company, or both. If the defendant is a business, but someone has signed a personal guarantee, you can make the claim to both. Write down exactly when you called, who you talked to, and what was discussed. Be friendly but assertive with your customer and try to get them to make future payments on specific dates. This gives you a reason to remind and the customer of their renewed promises to you. If you still don`t receive the money owed for your bill after sending a final payment request, it`s time to check if it`s worth suing your customer for non-payment. The costs associated with a lawsuit can be high and it can also take a long time to plead. You need to make a business decision to determine if it`s worth it. First, assess what you are owed: the total amount of all your invoices, as well as any related expenses that have not been reimbursed to you.
Next, assess the financial health of the business you want to sue to make sure it has the money to pay you back. Consider factors such as: Little preparation is required or required. Provided you have documentation of debts owed to your business – i.e. a contract or invoice, proof that services were provided or goods were delivered, as well as a request for payment and proof that payment was not made – if you are able to prove your case. You must also consider any objections raised by the customer or customer in advance and be able to deal with and reject them. When deciding to take legal action for non-payment of bills, a number of factors can take up valuable time and resources. Talking to a lawyer can help ease this burden on your business while ensuring you make informed business decisions when you recoup your losses. Contact your local debt collection lawyer today to learn more.
At this point, your legal notice for non-payment of the invoice should set a strict deadline for full payment. You must inform the client that if payment has not been received in your claims by that date, a collection lawyer will contact him and legal action will be taken. The next step is to file and serve a claim in a court of competent jurisdiction. Typically, this is the county where the transactions took place or where the defendant lives/operates. Before taking formal legal action, it`s a good idea to send a final payment request to the customer. There is a good chance that the threat of legal action included in a final claim can convince the customer to finally pay his bill late. If not, the final payment request is important evidence in court that you made one last attempt to resolve the issue before suing your client. A final request for payment should be an official letter that states: “Many businesses and individuals do not understand the legal barriers to recovery,” she said. “So if they are debtors and your lawyer contacts them, many will simply pay without further analysis.” To have the best chance of winning your case, make sure you present a strong and valid case with all supporting documents such as contracts, unpaid invoices, and proof that you have tried all means to secure the payment. Keep the details simple and if you can get legal advice, do it. However, remember that you cannot have a lawyer to represent you at the SCC.
If payment is still not made after reminders, perform a simple cost-benefit analysis where you determine whether the cost of the lawsuit is higher or lower than the amount of money you are asking your client to pay.