Taking legal action against slow or non-paying customers is no easy decision. There are numerous factors that come into play when making such a decision, such as time and cost investments, as well as potential damages to customer relationships. There is even the likelihood of actually collecting the debt – which is sometimes no more than an educated guess – to take into consideration. That said, there are several criteria you can evaluate to determine the probability of recovery, including the customer’s:
- Payment history
- Pending sales or bankruptcies
- Judgments or liens
- Cash flow and assets/liabilities
Whatever route you take to decide whether or not to pursue legal action, you should be educated about what’s involved and realistic about the potential outcome. For more information, we encourage you to read “Collection Agencies vs. Collection Attorneys”, an original article from Transworld Systems Commercial Division. You can also contact us directly to further discuss.
What are your experiences?
If your organization has taken legal action against a customer in the past, we want to hear from you. What are the pros and cons of going through the legal process, and how would you rate your overall experience? Use the “leave a reply” link below to comment!
