Debt Collection


This thread is the unfortunate result of an earlier thread. In a nutshell I have a big client (multi-million $ profit) for whom we did work. The admit they owe us the money (as if the contract, delivery of the project and sign-off documentation wasn’t enough). They are late on payment by 30 days (i.e., it was NET 30, that went by and we are another 30 days out again).

The communication is sporadic, they tend not to respond until we get to a ‘breaking point’. They are saying that ‘the-check-is-in-the-post’, but never say when it was cut or when we should expect it. And that check does not cover the full balance, the remainder they point out there’s now no budget for (after officially authorizing it) -the hint being not to expect that payment at all I guess?

The total sum is in the $10K range, and for a small business owner represents a substantial part of our yearly income.

Does anyone have a suggestion of a debt collection agency, or business best practice next step? I have a meeting w/ an attorney coming up and have looked into debt collection (but for that theres a cost of 20%-30% of the collected debt in payment for their services). I think I am doing it the right way, but would take any advice, especially recommendations on services that could handle the resolution for me (I have other clients whose paying work this issue is distracting me from).

Appreciate the help!

I wonder if you really think that the OP has waited for two years for your silver tongued advice… or are you just posting to rank up your post count?

Four words: Take them to court.

Going to court and using the attorney even at 30% is still more then you’re likely to get on your own. They obviously have no respect for you and the time and effort you’ve given them. I figure you can have 7k or 0k, your choice.

Thanks for the advice!

So you think push more on the attorney option rather than the debt collection service?

Have you used a good debt collection service (if one at all)? I’d be interested to read your experience.

I don’t have any experience with this, but I figure they can ignore a debt collector just as effectively as they can ignore you. But you go to jail for ignoring a court summons.

Well, I haven’t used a collection agency, but I have sued a couple in federal court (and won).

Going to court is definitely an option as is employing a collection service (who can also go to court on your behalf). The benefit of a collection agency is that you get their power and authority – a judgment is wonderful but it doesn’t guarantee payment either and the costs for getting one can be high if the case is complex or drawn out. Collection agencies tend to be fairly aggressive in going after debt of any nature but you’ll almost always pay 30% or so for them to collect on it which may be far more than suing directly.

From my experiences with larger companies, they tend to have a slower pay cycle. In some cases 90 - 120 days. I know it sounds ridiculous, but they do what they can to hold on to their money. My small business clients pay mostly in 15 - 25 days like clockwork, but the larger companies have multiple approval processes and such. This should at least relax you if they have not flat out lied.

If they did say a check was in the mail and it was obviously not, then you should probably move ahead by legal means. I would contact an attorney and see what he would charge to draft a letter (just as a starting point) to see how it gets going. Since they would have lied to you, there should be no problem getting your money. I would only take them to court as a last resort.

Hope i can help you.

As such today the market is full of Financial Agencies.

Its easy to get rid of within few days.

A big client who is 30 days late on a NET 30 payment? Just wait a little longer and keep sending invoices, etc. Until they reach AT LEAST 90 days you may not even be on their radar.

I have a suggestion that is perhaps in between the other two (debt collectors or court). First, let me say that I agree with Sagewing that if it’s a net30 and its only been 30 days, you may want to just keep sending invoices for another month or two.

That being said, if you can’t afford that, perhaps you should retain an attorney to write them a demand letter. Just make sure that any third party that helps you complies with the Fair Debt Collection Practices Act (15 USC 1692) and the Oregon Unfair Debt Collection Practices Act (Or. Rev. Stat. SS 646.639, 646.641).

Let me know if you have questions.


Any opinions are offered without knowledge of the specific law of your jurisdiction and with only the limited information provided in your post. No advice given here should be reasonably relied upon by you or any third party without consulting an attorney who is aware of all of the facts and law surrounding your situation. Any advice given here is not intended to create an attorney-client relationship in any way.

Deena, last I checked the FDCPA applies to personal and household debts, not business debts and other debts accrued over the course of conducting business (I should know - I’ve sued collection agencies for violating it in federal court before and won).

Sorry Dan, you’re absolutely right. I should know that since I, too, have sued debt collectors for violation and won. I’m apparently a little slow on the uptake today…


Either that or you’re still recovering from Hanna. We all have our off days once in a while (in fact, after talking with one of my hosting providers, I feel like I’m having one right now).

You actually sued them, went to court, and a judge ruled in your favor?

This is also a reason to host all of your work-in-progress on a development server (or just a subdomain of your website…) and to refuse to release it until full payment is received. Large companies have the money and want their website. I have found they will always pay under those circumstances. But once they have the goods, while I’m certain they still plan to pay, the motivation is not as strong.