Don’t give up, especially if you know the clients have the means to repay you or will have those means soon. There are some legal approaches for collecting debts.

Take the Client to Small Claims Court

For debts that aren’t too big, small claims court should be the first option to consider. There are small claims courts in every state and they are designed to deal with disputes that involve relatively small sums of money. Depending on the state, this can range from $2,000 to $7,500.   In Florida, Dollar Limit on Florida Small Claims Cases. To bring your case in small claims court in Florida, you must be seeking to recover $5,000 or less.

Small claims court is ideal for collection of small debts since it is relatively quick and inexpensive. The most common kinds of cases in small claims court are in fact debt collection cases. Additionally, a lawyer is not required for you to proceed with your case. Some states like Michigan and California do not allow individuals to be represented by an attorney in small claims court.  In Florida, you are allowed to have an attorney represent you in small claims court. If attorneys are used, parties are subject to discovery.

You will win by default if you file a suit in small claims court and your debtor doesn’t show at the required time. Most clients don’t contest unpaid fee claims in court because they are aware that they owe the money and they cannot win.

Take The Client to a Higher Court

If the amount owing is much more than the limit for small claims court in your state, an option is to sue in a formal state trial court, sometimes referred to as the superior, municipal or district court. Cases for debt collection are usually fairly simple, therefore you can proceed on your own or you can hire an attorney on a limited basis to give you legal advice or for a strategic approach. Most cases do not proceed to trial. The defendant usually agrees to settle the case prior to going to trial or simply doesn’t show up, in which case you are automatically awarded judgment for the amount owing.

Go to Arbitration with the Client

Look into your client agreement to see if there is a clause for arbitration before suing the client. The provision is usually entitled “dispute resolution” or “arbitration and you will need to submit any client disputes to arbitration instead of proceeding to court.

Mandatory Arbitration is being written and more often into a variety of agreements, not the least of which are credit and debt agreements.  there is such a clause in your contract, you will not be able to sue the client in small claims court or any court at all. This can actually be a good thing. Arbitration is inexpensive, fast and informal, much like small claims court. The major difference is that the case is ruled on by the arbitrator and not a judge. A judgment by the arbitrator can be entered with a court and enforced similar to a standard court judgment.

 

Marcadis Singer, PA, is a Florida based law firm dedicated to debt collection.  We work with attorneys that are owed money, as well as entrepreneurs, small businesses, and large financial institutions.  The entire focus of our practice, is recovering debt for our clients.  Call today for a consultation.

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