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5 Reasons NOT to Call a Lawyer for Past Due Debts

You’re a small business owner, and you’re having a hard time collecting payments from some of your customers. A friend tells you that you should call a lawyer to get the money you’re owed, but you’re not sure if that’s the best course of action. After all, lawyers can be expensive, and you’re not even sure if they’ll be able to help. 

Before you pick up the phone and call a lawyer, here are five reasons to think twice about whether or not that’s the best course of action for your business.

1. Lawyers are expensive.

The first—and perhaps most obvious—reason to think twice about hiring a lawyer to collect your past due debts is that lawyers are expensive. Hourly rates for lawyers can range anywhere from $150 to $350 per hour, and you can bet that they’re not going to work for free. 

If you don’t have the money to front the bill for a lawyer, hiring one probably isn’t going to be an option for you. And there is also the question of amounts. Yes, you might be able to get full restitution for the past due account, but at what cost? As a result, you can end up throwing good money after bad. 

2. You might not need a lawyer.

Just because you’re having trouble collecting payments doesn’t necessarily mean that you need to hire a lawyer. In many cases, businesses are able to collect their debts without any legal assistance. If you’re confident in your ability to negotiate with your customers and come to an agreement on payment, there’s no need to spend the money on a lawyer.

Some helpful ideas for getting your customers to pay up: 

  • Offer payment plans
  • Avoid confrontational attitudes when attempting to collect
  • Follow up in a timely manner
  • Take good notes on each interaction so you can have a record of the customer’s reasons for not paying on time

Staying the course and getting organized can get you paid quickly. It can also help you to forgo that attorney expense altogether. 

3. Lawyers are not always successful.

Even if you do decide to hire a lawyer, there’s no guarantee that they will be successful in collecting your debt. In fact, many times lawyers are unable to collect anything at all. If you do decide to go this route, make sure that you have a clear understanding of what their success rate is so that you know what kind of results you can expect.

4. The process can take months—or even years.

If you do decide to hire a lawyer and they are successful in collecting your debt, it’s important to understand that the process can take months—or even years—to complete. This is especially true if your customer decides to file for bankruptcy or challenge the debt in court. In some cases, it might even be faster—and less expensive—to just write off the debt as a loss. 

5. You could damage your relationship with your customer. 

If you hire a lawyer and they start calling or sending letters demanding payment, it could damage your relationship with your customer—and that’s not something you want to risk if there’s a chance they might still do business with you in the future. If possible, it’s always better to try and work out an agreement directly with your customer before involving any third parties. 

Never Make an Attorney Your First Call for Debt Collection Issues 

Hiring a lawyer might seem like an attractive option when you’re struggling to collect payments from customers, but there are several reasons why it might not be the best course of action for your business. Before making any decisions, weigh the pros and cons carefully so that you can make the best decision for your company.

Southwest Recovery Services has been the best option for small business owners, as well as larger companies, for a number of years. We have the tools, the resources, and the legal knowledge to get you paid quickly without having to worry about regulatory compliance. So before you pick up the phone to dial an attorney, let us give your cases a look. You’ll be pleased with the effort. Contact us at your earliest convenience! 

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