How to collect money that is owed to you
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Collecting money that is owed to you can be challenging but it can be done
Heading out with a loaded shotgun,
determined that this is the answer to how to collect money that is owed to you, is a very bad idea. Do not resort to this, as mad as you might be and as
much as you may need your money. There are appropriate ways to collect money that is
owed to you. Do not resort to vigilantism. There are sane and legal ways to recoup your cash.
Nobody likes being left high and dry, whether it is the
result of a business transaction or the result of loaning money to family members or
friends who swore on a stack of bibles that they would repay you. You may be
a landlord who discovers that your renters have fled in the
middle of the night, and left you holding the bag for outstanding utility bills.
Being owed money is infuriating, but do not let your anger
get the better of you. Be prudent and go about collecting your money the right
and legal way or else you may be the one who is hit with a heavy fine for
breaking a law.
Consider taking your problem to small claims court.
Contact small claims court in your town or vicinity and request the necessary
paperwork needed to file a claim. Usually, this approach is a straightforward procedure
and uncomplicated. You do not need an
attorney to file the paperwork; you can do it. Nor do you need an attorney to
represent you in court. However, you are responsible for making and presenting
your case, including providing documentation and evidence.
The small claims process is
geared to move expeditiously. Decisions are normally handed down the same day
of your hearing. Usually, the cost of filing a claim in small claims court is
nominal. Once you file the paperwork, the opposing party must be served with
notification. The court will set a date for your hearing, and this route for how to collect money owed to you is quickly in motion.
Another approach to collecting money that is owed to you
is mediation or dispute resolution. A judge may direct a mediator to deal with
you case instead of having a court hearing. Mediation can move faster than going to
court and it may be cheaper but it is not completely effective because the two
parties must voluntarily come to an agreed upon settlement and that does not
always occur.
A variation of mediation is arbitration. This is a
cost effective and fast procedure; however, the arbitrator gets the final say
and makes the decision. Both parties are bound to honor the decision of the arbitrator.
Some individuals opt to go to a collection agency in an
effort to collect money. A collection agency is a business that one can hire to
pursue debt collection; however, this can be an expensive approach in how to collect money. In fact,
some agencies charge up to 50 percent of the amount that is collected.
You can always contact the credit bureau in your state, which
can instruct you on how to make the bad debt owed to you a part of the credit report of the person who owes you money. This does not get your money back but it can certainly cause
problems for the person who has not made good on the money he owes you. In fact, it may encourage him to
make restitution to you so he can clear up his bad credit report.
If you are determined to go to small claims court, and
the amount of money you are seeking is substantial, you may want to hire an
attorney. Furthermore, if the person you
are dealing with is an extremely difficult character, having an attorney
on board can be helpful.
You may not be able to recoup all of your losses but getting some money back is better than getting nothing at all.
Resources:
Microsoft.com: small business debt collection