If you run a business, you’ve probably faced a customer who just won’t pay their bill. You’ve called them multiple times and even offered a payment plan but nothing seems to work. At some point, you start thinking about what would happen if you hand that account over to a local collection agency.
The first step is reviewing what you’ve sent.
When you hand over an account to a commercial debt collection agency, the first thing they do is review all the details. They will look at your contracts, invoices, statements, proof of delivery and any signed guarantees. The more complete your documents are, the faster the process usually goes.
Sending the first official notice.
After reviewing your file, the agency will send a formal demand letter to your customer. This letter explains exactly how much is owed, the available payment options and how to reach the agency to settle the debt. Most debts that get resolved do so during this stage.
Double-checking details when something doesn’t add up.
If the debtor disagrees with the amount owed, your Dallas debt collections agency will send copies of invoices, signed purchase orders, delivery receipts or any other proof that shows the balance is valid.
Working out a payment plan.
Once the conversation is open, the agency will work with the debtor to negotiate payment terms. Sometimes they pay the full amount immediately. Other times, they agree on a structured payment plan that suits their situation.
Should you keep talking or take legal action?
After about a month, the agency will review the account with you to see where things stand. Some debts resolve through continued contact but others just don’t move. When that happens, you will have to decide whether to keep trying or take legal action.
In Texas, you generally have four years to file a lawsuit for breach of contract. If you wait too long, you could lose the right to sue.
For local debtors, the agency can check public records to see if they’ve been sued before and if they have any assets worth pursuing. That can help you decide if legal action is worth the time and cost.
What happens if it goes to court?
If all the other collection efforts fail, the best option might be litigation. The agency will usually send a final pre-suit demand. If the debt still isn’t paid, the case moves to court.
Debts up to $20,000 are usually handled in Justice Court (also called small claims court). Larger or more complicated cases go to the County or District Court. If you win, the court will issue a judgment in your favor.
With a judgment, you can collect the money through legal methods like a writ of garnishment (for business accounts), a writ of execution or a turnover order. While Texas law doesn’t allow wage garnishment for most debts, business bank accounts and other non-exempt assets can still be used to recover the debt.
Williams Rush & Associates can help you collect what’s yours.
If your Dallas or Houston business is dealing with customers who haven’t paid, we can help. Williams Rush & Associates is a licensed and bonded Texas commercial debt collection agency serving businesses across the state. Contact us today to discuss your overdue accounts.