Expecting payment in a timely matter after providing customers with services or products is not unreasonable. Your business takes an impact when customers fail to pay your invoices. This problem is fairly common and very unfortunate. Some of your loyal customers will resolve any payment issues, however, there are those that feel entitled or that try to validate their service or product was unsatisfactory in order to get something free. When pursuing your rights to collect payment from parties that fail to render payment, we at Kajioka and Associates, Attorneys at Law would like to share your options on collecting those funds.
How to Collect Money Owed from Your Customers
There are several collection methods used in Nevada. Like many business owners, you do not want to have to resort to legal proceedings and the court process unless it is necessary. Attempting to work out the issue with your customer is generally the first course of action, but when you clearly see that additional methods are necessary, it is a good idea to know your resources. Below are several of the most common methods used in Nevada to collect money owed.
1) Small Business Debt Collection Agency. Hiring a debt collection firm or agency is often the method businesses turn to when customers refuse payment. There are plenty of attorneys and companies that handle debt collections on behalf of your business throughout the Valley. Falling under the Fair Debt Collection Practices Act, this type of debt collection provides guidelines for contact with the parties that owe you money.
2) Become a Secured Creditor. Taking priority over another creditor whose extension of credit does not come with any security establishes you as a secured creditor when you claim a right to property you sold to your customer designed to ensure payment. You reserve the right to retake the vehicle in lieu of payment, for example, if you sold a non-paying customer a car with a secured loan on the vehicle.
3) Replevin or Attachment. You could ask the court for a replevin or attachment in the event you fear a customer will dispose or destroy the secured property, however, the courts only permit this course of action under specific conditions.
4) File a Lawsuit. Filing a lawsuit to collect the bill owed from a customer is another method. The court issues a judgment upon which you can collect if your customer fails to respond to the lawsuit and the evidence supports your claim.
5) Involuntary Bankruptcy. An involuntarily bankruptcy could be initiated, in extreme cases, typically when the customers owes a significant amount to several creditors. The trustee sells the customer’s assets to help pay debts owed to you and others with the courts approval.
6) Judgement Lien. Another way to receive payment from a customer is to implement judgment liens or materialmens and mechanics as an alternative. Taking advantage of the legal methods of collection, a judgment allows you a more practical solution with a better result where many small businesses are unable to initiate an involuntary bankruptcy for example. To ensure success of any court proceedings, it is in your best interests to consult with and hire an debt collection attorney to take care of the process. Where there many methods you can used to collect a debt from a non-paying customer, an attorney with the expertise of the laws involving debt collection gives you the edge.