As all business owners sooner or later learn, some people don’t pay their bills. In this situation, you must first decide whether your relationship with your customer exceeds the amount owed and how much time and effort you want to spend collecting the money owed.

If your relationship with your customer is still intact, you should call them directly and determine why your bill is not being paid. If it’s simply a misunderstanding or miscommunication, you may be better able to resolve it by having an open discussion directly.

However, if your relationship has deteriorated to the point where you no longer expect to do business with this customer and the customer is acting unreasonably by refusing to settle their account, then you need to determine whether and how to pursue collection.

Debts are always worth collecting, as long as they don’t cost you more time and money than they’re worth. Generally speaking, the larger the debt, the more time and effort you are willing to spend trying to collect it.

If the debtor is willing to pay, collecting the money owed often requires nothing more than sending letters and making phone calls requesting payment. If you don’t want to waste time, or don’t feel comfortable asking the debtor to pay you, collection agencies will perform these tasks for you in exchange for a “contingency fee” in which they retain a percentage of what they collect. However, if the debtor is not willing to pay you voluntarily, sending letters and making phone calls may just be a waste of time. Either pay off the debt or hire a lawyer.

A common misconception is that it costs a lot of money to hire a lawyer to collect a debt. Unlike trial attorneys who charge an hourly rate regardless of the outcome, most collection attorneys charge a “contingency fee,” just like collection agencies. Like collection agencies, they will also write letters and make phone calls; except that your message to the debtor will be that a lawsuit will be initiated if the debt is not paid. However, unlike the hourly rates of trial attorneys, the debt collection attorney only gets paid if he actually collects the money owed.

In addition to payment method, there is another distinction that is vital to consider when selecting a debt collection attorney. While most attorneys will be able to file a lawsuit and obtain a judgment (a determination by a court that the defendant is in debt to the plaintiff for the specified amount), only a debt collection attorney with advanced technology and software computer will have the necessary tools to locate assets or employment in order to enforce the judgment. Once these assets or employment are located, the debtor’s wages can be garnished, their bank accounts seized, and their assets sold and liquidated.

In conclusion, once you decide to collect what you owe, you can call and request payment, you can hire a collection agency to call and write letters for you, you can hire a trial attorney and pay them to sue, or you can hire a experienced debt collection attorney to obtain and enforce a judgment in exchange for a percentage of what they can collect.