Among Friends

[Puppy Lips]

Our small business is due over 5K from over a year ago.  We have never been in this position before, when we were not paid for something.  The person is in a dfferent state than we are.

I have no idea where to start here.  Do I find a collection agency?  I assume the agency gets a cut, meaning I would get less than we are due.  Or do I file a civil lawsuit?  How would I go about that?

Thanks for any advice anyone can give me.

[Imaoldhippie]

So you do everything nice and legal hire a lawyer.

[Love my grandkids]

@Puppy Lips I agree with the previous poster.

Hire a lawyer, it will be worth the money and will be legal and by the books.

[sashamatthews]

Did you have a signed contract which places jurisdiction for the work in your state?  if you do, then you may be able to file a small claims action in a local court if your state small claims limit is $5,000 or less.  

[Puppy Lips]

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@Imaoldhippie wrote:

So you do everything nice and legal hire a lawyer.

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@lmaoldhippie

Should I find one local to us, or in her state?

[RespectLife]

@Puppy Lips 

I work in a small business also.

We use an attorney.  His cost is about the same as an agency and way less hassle.

Most people/businesses will ignore collection agencies but are less apt to ignore an attorney.

He will also have knowledge of what your options are where as a Collection Agency just writes letters and annoys.  They typically have no legal knowledge or expertise.

Our attorney is local.  In one case before, he was able to refer us to counsel out of the area.

We work local and are able to lien the project, meaning put a legal 'hold' on it.  We do site work (sanitary, roads, sewers etc)...so that lien means they won't be able to continue or build on the project.  We only do that as a LAST resort.   It doesn't sound like you have that option.

Sadly, we have had funds owed longer than that!

Best of luck!

[MandyG06]

Document every attempt to collect, even if it's writing down the time and date you made the phone call, who you spoke with, what the conversation was, etc. You have to show your company made fair attempts for collection of past dues. If you haven't, good idea to start now. My recommendation is certify mail all outstanding invoices with proof of receipt of product with 30 day notice of payment due. Include a letter with the last 'in good faith' attempt to collect all past dues by (fill in the blank). If the customer doesn't attempt to contact you by that date, then be very clear you will engage in legal action at that point. 

[chrystaltree]

You don't do either of those things now, first you hire an attorney to review the case and advise you.

[Imaoldhippie]

If it were me I would start with a local attorney.  Good luck, I hope you recoop most of your money due.

@Puppy Lips 

[Mz iMac]

"over 5K from over a year ago"

All states has a "Statute of Limitations on Debt."  Some the statutes are only 3 yrs.  If your state falls in that catagory, like others have already stated, get an attorny ASAP so he/she can file suit before the statute runs.