The 8-Step Guide for Dealing With Nonpaying Clients

If you’re reading this, you’re probably having trouble getting a client to pay your for your work. We’ve been where you are now, and it’s no fun. Speaking from experience, it’s hard to know what to do in your position, so while every situation is unique, what follows is a general strategy for you to move forward.

Your first instinct may be to call a collection professional (an agency or lawyer), but that’s not always the best path. Bringing in the big guns means there’s a good chance your client relationship will never be the same, and you’ll have to give someone else a significant chunk of the money you’ve earned. Whether you find and manage your collection professional yourself or use our service to do that for you, this should be your last resort.

Of course, in some cases it’s obvious that your client isn’t going to play ball. If that’s the case, these first few steps won’t make sense for you and you can skip ahead.

Step 1: Put them on notice.

Client on Notice_Photo by Hugo Jehanne

Politely but firmly let your client know it's time to pay. Include (or resend) a formal invoice. Let them know you want to resolve the situation quickly and informally, but that you'll go further if necessary.

Step 2: Keep the pressure on.

Keep the Pressure On

Be persistent. If your client tries to kick the can down the road, make sure they know that’s not acceptable. While it’s not a big deal to them, this payment is a priority for you. Don’t just send an email and leave it at that. There’s an adage that goes, “The squeaky wheel gets the grease.” Of all the people your client owes, you want to be the one they most want to make go away. You want to be the squeaky wheel. Reiterate that you want to solve the situation amicably but that your next step will be a formal, less pleasant one.

Step 3: Go up the chain.

Go Up the Chain_Photo by Charles Deluvio 🇵🇭🇨🇦

Some clients think they’re too busy to worry about paying you. If your client answers to someone, you can realign their priorities by bringing their boss into the conversation.

Step 4: Decide whether it’s worth the fight.

Worth the Fight

If you don’t get a response within a few days, consider whether you’re going to want to work for this client again in the future or whether the social awkwardness will be worth it. Frustrating as it may be, if this is an important client or someone you’re going to have to interact with a lot in the future, it may be worth writing this one off even if you disagree with their reason for not wanting to pay.

Step 5: Send a formal Demand Letter.

Send a Formal Demand Letter

Don't be afraid to CC the client’s boss, partner, board member, etc. Let them know you'll take legal action if you're not paid in ten business days.

CLICK HERE for our FREE Demand Letter Template.

DO NOT post anything negative about your client in any public forum, including on social media. While it may be satisfying in the short term, you could wind up being sued later.

WARNING: You might have a lawyer friend who is willing to write a letter for you. Think twice before you take them up on the offer. If you have an outside party make an attempt to collect for you, collection agencies and lawyers might later charge you more or refuse to work for you because they’ll assume your case is more difficult.

Step 6: Take them to Small Claims Court.

Take Them to Court_Photo by Claire Anderson

If the amount is low enough ($2,500 to $25,000 depending on your state), consider Small Claims Court. If you have the time, energy, and money to pay filing fees (usually less than $200), go to small claims court. This can be draining, but if it's about the principal, having your day in court might be satisfying.

WARNING: Even if you get a ruling in Small Claims Court, your client can still ignore the ruling. Then you’ll have to go through another process to collect on your judgment.

Step 7: Engage a collection professional. (Or have Freelance Collection do that for you.)

Engage a Professional_Photo by Melinda Gimpel

If the amount is high enough, consider using a collection agency (minimum $1,000) or lawyer (minimum $2,500). Both will keep a significant portion of the money they recover for you, but there are important differences:

Collection agencies attempt to contact your client and negotiate on your behalf. They can be persuasive and can report your client to the credit bureaus, but at the end of the day, your client has to agree to work with the collection agency. Collection agencies shouldn’t charge you anything upfront.

Lawyers first threaten to sue then they actually sue. While lawyers can be more effective than collection agencies, they typically charge a few percentage points more or you have to pay by the hour, the process can take many months or even years to play out, and you’ll have to front court filing costs of up to $700.

Finding the right collection agency or lawyer is hard if you don't know the space, and the better ones might not take your call because they prefer bigger customers. Consider letting Freelance Collection manage the process for you so you can get back to the work you love.

Step 8: Know when to walk away.

Walk Away_Photo by Amy Shamblen

If you've exhausted these steps, it may be time to move on for the sake for your own sanity. Learn what you can from the experience because you paid for the lesson.