What Happens When A Client Doesn’t Pay?

Posted July 09, 2025 in Uncategorized

Even with an ironclad contract, business owners may encounter clients who fail to fulfill their payment obligations. Maybe the client never had any intention of paying the invoice, maybe they’re facing financial stress, or maybe they’re refusing to pay because they dispute the charges on the invoice. Regardless of your customers’ reasons for non-payment, they still owe you money, and you deserve to get it.

When your polite reminders aren’t doing the trick, our business dispute lawyers Littleton can help you resolve the matter while preserving your business relationships and company integrity.

Treat the Non-Payment As an Innocent Mistake

Assuming you want to preserve the business relationship, treat the non-payment as a simple mistake rather than acting as if the client intentionally refused to pay. Sending a polite invoice reminder and then following up with sterner demands for payment gives your customer the chance to rectify the non-payment. Make sure that if you remind your customer verbally about the delinquent invoice, you follow it up in writing, just in case you need to escalate the matter. And, don’t forget to set a firm due date (no more than two weeks).

If your customer fails to pay after the reminder, you can escalate the matter by sending a debt collection letter.

Send a Debt Collection Letter

Debt collection letters are more formal than polite reminders. You may wish to have your business dispute lawyer draft the letter; a letter from an attorney may prod your non-paying customer to take action.

The letter should include the date the payment was due, the total amount due, the deadline for sending payment before you escalate the matter, and the forms of payment you’ll accept. If you suspect that your customer is facing a cash flow problem, you may stipulate that you will only accept a cashier’s check.

It’s up to each business owner whether they wish to send a second, more strident, demand letter if the first elicits no response. Whether you choose to take legal action after the first demand letter or send a second letter is your decision.

Initiate Legal Action

After reminders and demand letters have gone unanswered by the delinquent customer, you can either pursue the matter in small claims court if the amount owed is less than $7,500 or have your attorney initiate a lawsuit for non-payment (for a larger amount).

If the customer fails to appear in small claims court, you win by default.

You may be owed substantially more than $7,500. In that case, you can file a lawsuit against the customer. Be aware that simply by filing the suit, you’re likely to go scorched earth with that vendor. Consult with our legal team about reputation management for your business as your lawsuit progresses, as other customers may be closely following the proceedings.

Most collection lawsuit cases reach trial; however, the defendant usually settles beforehand. They may not even show up, so you may receive a default judgment.

Consult Volpe Law For Outstanding Debt Actions

Do you have a customer who has failed to pay? Our business dispute lawyer serving Littleton can help you evaluate your legal options. Contact our firm today to schedule a complimentary discovery call with the Volpe Law LLC legal team.