At the start of a business relationship, it is almost always the case that each party is entering into the respective agreement with a certain degree of enthusiasm and optimism. If they did not view it as a situation that would be likely to produce a desirable outcome or benefit, then the parties would instead choose to seek another company or client with whom to engage in business. But many times the subsequent events do not go according to plan and the fallout can leave you without the money that you are rightly owed for your services or products, making it necessary to engage in collection efforts.
Understanding your own rights in the situation is obviously very important, but it is equally important to ensure that you have a firm grasp on the rights of your clients, as well. The unwitting violation of a debtor’s rights can leave you subject to significant fines and other sanctions that could threaten your company’s ability to continue with operations. But there are some measures that you are permitted by law to take in an effort to recoup outstanding debts, and knowing how to most effectively use the tools at your disposal can be a great boost to your bottom line.
Consulting with a skilled and experienced lawyer who can advise you on the availability and appropriateness of different collection methods is an absolute necessity. Legal professionals are apt to have a broader and well-formed base of knowledge on the subject and can open your eyes to possibilities that you may not have thought to consider. After all, though you may have momentarily thought about the prospect that a client would shirk his or her responsibility to you, you would not have conducted business unless you thought it much more likely that payment would be received promptly.
Some of the possible solutions to resolve an outstanding debt that is dragging down your profits and distracting your time, energy, and attention are:
- Attempt to establish an alternative payment arrangement that allow a client the necessary flexibility to repay you fully
- Pursue a wage garnishment
- File a lien or default judgment against the debtor
- Terminate services or seize unpaid merchandise
- Sell the debt to a collection agency
The longer you permit unpaid balances to linger, the more difficult it becomes to collect the money that is owed. For guidance, contact the Des Moines business lawyers of LaMarca & Landry, P.C.