Collection Agency?

We are business owners as well.

$400 would not be worth my time other than reporting her in to the BBB.

In our line of business, word of mouth in the industry is enough to know who to allow 30 days, etc. We just had a scare with 1 company owing us $95,000 and they were talking of shutting a plant down. Thank God, they have paid it all but $15,000 so far. It is tough but sometimes you have to take the hit, right it off and keep going.

For $400, is it worth your time, money and effort for small claims court simply to get a judgement on monies you most likely never see?

Because you sent her a notice stating you would go to collections, DO IT. Always follow through on what you say you will do or no one will believe you in the future.

I see you are in Allen.... me too!! Best wishes with your business.

NB

I'm sorry you are having trouble getting a client to pay you. I had trouble with a boss paying me - so I can just imagine how it would be to have it reversed!!

Since you have already done your due diligence - I would go to small claims court for the remaining amount.

Going to a collection agency will cost you more than the client owes you. Small claims court will be substantially less and easier.

I don't know what business you do, in the future, I would have a credit card on file to charge to or an e-check to run so this won't happen again.

GOOD LUCK!!

A collection agency is going to take a percentage of what is owed. Since it is such a small amount, either write it off, or take her to small claims court. I don't know about Texas, but when I worked for lawyers in MD, you can take her to court, it was around $20-$25 to file. Once a judgment has been entered, you most likely can get court costs back (if not cheaper than collection agency). You can then file to garnish her wages, freeze her bank account and even have a sheriff come to her house and tag all her items for sale. If her items are tagged, and she removes them from the house, there is another penalty and I think it's an actual crime that she can be brought up on charges. Also, find out how to report it to her credit report. Does she own a home? You maybe able to file a lien against her property. I just checked out the Collin County website and it's not as extensive when it comes to rules and forms online. You may have good luck going to the courthouse and the law library (Make sure the courthouse has a law library before you go) or the regular library may have it, and research local rules for small claims court and collection after judgment.

Even if you take her to small claims court as recommended by others, the responsibility is still on your shoulders to collect the $$. Small claims will also reimburse you for your filing fees if you request it in your paper work.

What about offering her an installment plan? You would probably regain more of your losses than selling to a collection agency.

Why is she so angry over this amount? Does she feel it was an unfair amount? She is not happy with the services rendered?

Unfortunately, for all small business owners, you will inevitably run into disgruntled clients, no matter how perfect the service. So, you can at least write this off of your taxes.

GL!

Small claims court will cost you more out-of-pocket than the debt that is owed. A collections agency may be the way to go. Most work on contigency, meaning if they don't collect, you don't pay. A fee of 25% is pretty standard, I think. Might be worth it. Some money recovered is better than eating the $400.

Look into small claims court. In AZ it costs about $120 to file the case and get service of process. If the claim is breach of contract, you will likely be able to include those costs in your claim. Most small claims courts do not allow lawyers, so no attorney fees. If you get a judgment from the court, you would probably have something that you could pursue through a garnishment proceeding (but I am not familiar with TX courts). I just went through a very similar process for a debt that was owed to me, had a small claims hearing, and was able to recover my costs plus the debt without losing a percentage to a collection service. Plus, it is nice to hear a judge tell the other person that you are right :) If discussions, communication, talking, cajoling, pleading, does not work...that's what the small claims court is there for!

Well... I guess it depends upon what sort of business you're in. I own a construction company, and generally (although our terms are net 30), we are paid net 60 (which is pretty much the industry standard in retail construction). They know that around net 45, I start sending statements, and if I don't know a check number by net 59, I'm going to file a lien. (Which is the construction company equivalent of small claims court! :)

Being that she owes you $400, why not just take her to small claims court? I believe it would be less expensive than selling the account to a collections agency. If you have written documentation of the transaction, small claims should be a slam-dunk.

You have to ask yourself if it's worth it. Do you honestly think she would decide to pay a collections agency? Probably not. The collections agency would collect a fee, if the amount was recovered. IF. This kind of thing usually belongs in small claims court. Here, it costs $100 just to file. But, you are STILL responsible for collecting that money. So, you'd be right back were you are now...and out the money for filing.

I have a general distrust for collections agencies and the way they operate. I would be very careful proceeding on this.

What is the amount owed to you?

Wouldn't this be addressed in small claims court?

They all pretty much work the same way, they take at least 50% or more of what they collect.

Can you go to your client's home or business and ask for payment? Sometimes it's harder for them to ignore you when you are right in front of them. Let them know they would rather deal with you than a collections agency - say this very nicely and sincerely, because it is true. They can get pretty aggressive.

My husband's client didn't pay him for 6 months once and he was billing 40 hours per week and it was our only source of income. It really does suck but we knew they were good for it. If this client doesn't intend to pay I would probably take them to small claims court.

My recommendation for that amount would be checking into taking her to small claims court.