Take the amount owed into consideration. A small debt may not be worth pursuing right away, while a larger debt might take some time to collect. If you are owed money in the course of a business transaction, ask for it as soon as possible. Waiting on the debt will only make it harder to collect.
Don’t demand payment, instead offer a reminder (“Do you remember the money you owe me?”) that allows the debtor to save face. Include all relevant information when asking about the debt. You should be prepared to provide the amount given, when you received the last payment, the amount owed, any payment arrangements you are willing to accept, contact information for you, and a clear due date. If you are dealing with a company or client, it can be helpful to make this inquiry in the form of a letter. This gives you a paper trail if the situation escalates. For a due date, 10 to 20 days from the date the debtor receives a letter can be a good timeframe. It is in the foreseeable future but not close enough that the debtor feels panicked.
Don’t be too quick to bargain, as this may send the message that the debt can be negotiated down, or that the debtor can take even more time.
Your language here should be more direct, and show some urgency. Phrases like “You need to pay now,” or “We need to come to an arrangement now” let the debtor know you are serious, and you are not willing to negotiate further. Include clear consequences for not paying. Let the debtor know what you plan to do if you do not receive proper payment on time, and be prepared to follow through.
If the payment for a collection agency is too steep, you may consider skipping this step, and going to small claims court.
Calling at unreasonable hours; Adding additional fees; Purposely delaying collection in order to add more fees; Telling the debtor’s employer about the debt; Lying about the debt owed; Making false threats to the debtor. [2] X Research source
If you do go to court, prepare for your hearing. If you have a contract, promissory note, or any other documentary evidence of the debt, make enough copies that you can provide the Judge and the debtor, or his or her attorney, with a copy. You should also make copies of any other evidence you wish to submit in the same manner. This can be a drastic step. Make sure the amount owed is worth the hassle of appearing in court. If the debtor is a friend or relative, this can definitely have a negative impact on that relationship.
If you do go to court, prepare for your hearing. If you have a contract, promissory note, or any other documentary evidence of the debt, make enough copies that you can provide the Judge and the debtor, or his or her attorney, with a copy. You should also make copies of any other evidence you wish to submit in the same manner. This can be a drastic step. Make sure the amount owed is worth the hassle of appearing in court. If the debtor is a friend or relative, this can definitely have a negative impact on that relationship.
This option is generally more expensive, considering court and attorney fees, but if you are successful, it may be worth it more than using a collection agency. [4] X Research source The threat of a suit may be enough to bring someone to pay, but you should not make such a threat unless you intend to follow through.
At the hearing, you should ask the court for permission to garnish the debtor’s wages.
Individual states have different laws on wage garnishment, so make sure you are clear on the laws where you reside. [5] X Research source
