Whether you own a small business, a large corporation, or you are an individual, your livelihood is at risk if you have debtors who will not, or cannot, pay. Thousands of businesses fail each year because they do not receive the revenue to which they are entitled. If you are facing financial harm, it is wise to consider all your debt-recovery options. The simplest option is collection letters and phone calls. While you must avoid harassment, frequent calls and letters are powerful tools. If you feel the debtor is unable to pay the full amount, consider offering a legally binding settlement for less than the initial amount. In more serious cases when a debtor refuses to pay, a lawsuit in small claims court offers a low-cost option to enlist the assistance of the court in collecting your debt.

In the United States, debtors have a variety of protections granted to them by the federal government. Adhering to the Fair Debt Collection Practices Act is essential in order to avoid being sued by the party who owes you money. As mentioned previously, letters and phone calls are an effective tool to encourage payment. As a collector, you cannot contact the debtor after you have received a formal letter from them asking you to quit. At that point, your only option is to sue. In addition, if the debtor has retained a lawyer, all contact must be made through that lawyer.

Collection agencies have experience with the debt collection process, but agencies are not necessary. Writing demanding letters, making phone calls, and filing a lawsuit are all steps you can take with the assistance of a legal representative.