Collection Q&A: Is My Debt too Small to Collect?

Q. A few of my customers have outstanding invoices that they just will not pay. They aren’t huge debts, but they are starting to stack up in my accounts receivable. Is there any way to pursue smaller debts with legal action or should I just write them off?

At Wakefield Law, we have been performing collection legal services for Northern Virginia businesses of all kinds for over 30 years. In that time, we’ve seen debts ranging from a couple of hundred dollars to the hundreds of thousands. It doesn’t really matter the size of the debt, we know that business owners feel the hit every time a customer doesn’t follow through with payment. Here’s the truth: if you performed a service or provided goods with an expectation that you would receive compensation for your work, you deserve to be paid. Even a small debt can make a difference.

But, wouldn’t you end up paying more than the actual debt in legal fees if you choose to pursue legal action? No! At Wakefield Law, we perform collection services on a contingency basis. That means that we don’t get paid unless we are able to collect from your customer. Instead of charging an hourly rate for our work, we charge a percentage of any money we collect.

That means, if we are successful in collecting any amount toward your debt, you will end up with more than if you write the whole debt off. Isn’t a percentage of some money better than 100% of nothing?

Does this mean that you can hire an experienced legal professional to represent your business for basically nothing? Almost! The only cost to you is a small cost fund up front that allows us to do things like file court documents and pay for postage. The amount of the cost fund required depends on the size and complexity of the debt. For example, we would require a $150.00 cost fund for a $1,500.00 debt.

Sometimes clients tell us that they see smaller unpaid invoices as just the “cost of doing business.” But why should this be so? Why should you take the hit because someone else didn’t follow through on their commitment? In fact, not only should you not be writing off debts, but you don’t have to be paying for the attorney's fees, either. If your contract does not include a provision that requires customers to cover the cost of attorney’s fees, then it may be time to revisit your contract. Wakefield Law can also work with you to review your contract and amp up the collection provisions to help cover the cost of attorney’s fees in the future.

If your business has outstanding debts of any size, feel free to reach out to the experienced professionals at Wakefield Law. We are always happy to talk through your options and give you all the information to help you make a decision about collecting your unpaid invoices. Our office number is 703-771-9740. Give us a call!