What Are My Rights to Getting Money That Is Owed to Me?
Collecting debts as a business owner or contract worker can be an arduous process. Even if phone calls and even tempered letters have failed to compel the debtor to pay what is owed, you are still not out of options. You also have the right to use the civil court system, attorneys and even collection agencies as a means for collecting your debts.
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Contact the Debtor
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If you are a business owner who is owed a debt, you have the right to contact the debtor in writing or by phone to request prompt resolution of any late payments. These communications should be polite, clearly state the amount owed, what services were extended and the date the debtor is required to pay the delinquent balance before additional fees accrue. Remember, it is illegal for you to harass the debtor by using profane or threatening language. Doing so may land you in some legal trouble.
Small Claims Court
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If you are unsuccessful in your attempts to collect your debt by mail or phone, small claims court may be an option. Small claims court may resolve your debt if the amount is small, typically between $3,000 and $10,000, depending on your state according to legal information website Nolo. An attorney is not expressly necessary when you appear in small claims court though you are require to pay a filing fee when you submit your original complaint documents. A successful judgment at a small claims hearing legally binds the debtor to pay you the amount of money owed to you.
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Retain Legal Counsel
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Retaining a lawyer specialized in debt collection is within your rights when pursuing a consumer for a debt owed for various services including work performed or the sale of products. This is usually done when the debt owed by the consumer is higher than the maximum allowed by small claims court in your state. Once retained, the lawyer will handle communication with the consumer regarding prompt payment of the debt owed to you. If the attorney is unsuccessful, she may continue collection practices by filing a lawsuit against the debtor on your behalf.
Debt Collection Agency
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As a business owner or work contractor, you have the right to hire a debt collection agency to handle the collection of a delinquent or defaulted debt. A collection agency is bound by the Fair Debt Collection Practices Act and is required to communicate with the debtor in an appropriate manner and avoid harassing practices including contacting the debtor at all hours of the day. The collection agency may also file legal proceedings on your behalf in an attempt to secure a judgment to pay back the debt. Additionally, you may also report the consumer's debt delinquency to all major credit reporting bureaus. There is a fee associated with reporting this information but the threat of damage to the debtor's credit rating may be enough to force him to pay you.
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