Getting Paid: Collection Agencies and Courts

Fourth in a series.

In the first part of this series, we introduced you to an Ottawa photographer who, when asked about getting paid, joked that “baseball bats work wonders.” In this last installment, we’ll discuss how to swing the legal lumber: namely courts and collection agencies.

Freelancers in all sorts of businesses seem to be in agreement that going to court may be throwing good money after bad. But there seems to be plenty of advice out there about what you can do first.

The Freelancers Union, the industry group that counts more than 150,000 members, says the first step is sending a formal demand letter requesting payment. “We are writing to collect the past due amount of …” begins the sample letter on the group’s web site.

A Tough Situation

Professional copywriter Dean Rieck has some realistic advice on how to handle what’s admittedly a tough situation.

Writing on his blog ProCopyTips, he says, “Ask for immediate payment. Say you want to avoid any hassles like legal action. This is difficult to do. You won’t like it and the client won’t like it. But it has to be done. Still, be professional and don’t say anything you’ll regret. It’s at this point, you may lose your client forever. But then, a client who doesn’t pay is not a client you want. And a client who owes you money will never hire you again.”

After that, Rieck advises, “Pick up the phone one more time. Have a last conversation with the client and try to work things out. Offer a payment plan. Ask your client how to resolve the issue. And if this doesn’t work, your next call should be to a collection agency or lawyer.”

Choosing a Collection Agency

“If you opt for a collection agency,” he says, “try to find one near your client. This seems to have more impact. If you opt for a lawyer, try to find one who specializes in collections and who can follow through with a suit if it comes to that.”

The Freelancers Union’s web site has the name of a firm that gives members a 10-percent discount. It also advises members to seek out other members who are lawyers.

Here, Rieck urges caution. “Be realistic,” he says. “In the end, if clients don’t want to pay, they won’t pay. Collection agencies can work, but not always. And if you file suit, remember that clients can always file a counter suit and claim you didn’t do the work you promised. It doesn’t matter whether it’s true or not, you can sue anyone for anything. So consider the pros and cons carefully before you begin any legal action.”

Outing Non-Payers

But plenty of freelancers seem to endorse “outing” the non-payer. Freelancers Union has its Client Scorecard. Others have similar offerings. But Facebook, Twitter and LinkedIn can work too.

In the end, the best defenses against nonpayment aren’t letters and lawyers, but well-written invoices, frequent communications, and a polite but businesslike approach. Being selective about whom you work with helps too, according to one photographer.

He says his secret to getting paid is choosing good clients and being flexible about the definition of “on time.”

2 Responses to “Getting Paid: Collection Agencies and Courts”

  1. What is a good rule of thumb for when to begin applying pressure? 60 days late? 90 days late?

  2. What is meant by "outing" non payers?

Leave a Reply