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	How to Collect Business Debt
	Article 4: Go After the Deadbeat Yourself When the client just won’t pay despite your best efforts, ratchet things up a notch. Some options can be pursued without involving an attorney or collection agency, such as filing suit in your local small claims court or municipal court, for example. Arbitration may be an option as well. Small claims court is called that for a reason—it’s designed just for monetary disputes too small to warrant attorney fees. Usually lawyers aren’t even present. The upper limit allowed in small claims court varies by state, but typically runs between $2,000 and $7,500. Filing is simple and generally costs just $100 or so, although if the recalcitrant customer is located in another state, you may need to file there, notes Rosemary Taft-Milby, an attorney who manages the litigation and defense department in the Cleveland, Ohio, office of Weltman, Weinberg & Reis. Go to court armed with your evidence, such as contract, invoice, e-mail exchanges, record of collection calls and letters. But often the customer won’t even show up because the company knows it can’t succeed—and you win by default. The loser normally pays court costs. Judgments, though, “are not self executing,” warns Taft-Milby. You are on your own to collect, although the court can provide documents to help, such as a bank attachment on the debtor’s account or filing a property lien. If you are owed more than small claims court will allow, sue the deadbeat debtor in municipal court, which is a low-level state court. You can handle most of it yourself, but at least get a lawyer’s advice on strategy. Alternatively, you can go to arbitration if your contract specifies it as a remedy. Arbitration prevents you from suing in a court. But like small claims court, arbitration is fast, informal and low cost. Rather than a judge, both sides present their case to a trained arbitrator who issues a legally enforceable ruling.