Turning a client over to collection

[Lisa@srts-inc.com]

Hi,

We are a billing service and have a client who has refused to pay us.  They are no longer an active client and had been paying us when they were, but our last 2 invoices have been outstanding for for 4 months now.  I have called, emailed, sent a final notice and we are just being ignored.

Has anyone turned a client over to collection?  if so could you recommend one?  We have an agency we use for patient balances for our clients but they charge 30% and i suspect this client will pay once they receive that initial letter, so I am hoping to find an agency that is flexible on their rates.

Any help is appreciated.
Thanks
Lisa

[PMRNC]

Collections really doesn't work IMHO. I'd go right to small claims court! Most likely when they get the notice to appear they quickly pay. Check to see if  the amount qualifies in your area for small claims Depending on your state you could receive a judgement for full amount plus your filing fee, if your state doesn't provide judgement collection you could go and file liens with your city/court. I know a billing company who went that far and provider still didn't pay until she went and put lien on his boat.

[Michele]

Is the client in the same city?  If not, you have to do small claims in the city they are in. 

We use a company called Transworld.  They are all over the US.  I am not a fan of collection agencies but we've seen great results with this one.  If you aren't able to do the small claims I would give them a call.  I can put you in touch with the guy we use.  Let me know if you want his contact.

[PMRNC]

I've used Transworld for patient acct's but not for clients who owe money, have you used them for this Michelle? I've only had to go after one client in all these years and I tried collections ..he just ignored it so I filed small claims suit in his county and won because he didn't even show up, this was in NJ so I got my money 10 days later.  I did have to eat $400 of it because of the small claims limit but it was worth it, was a principal. Funny too because he called me about 2 years later not realizing he had stiffed me, turns out he has done it to other billing companies as well.

[Lisa@srts-inc.com]

Thank you all for the replies.  Unfortunately the client is in another state, pretty far from the state I am in.  I had checked into that, I was hoping she would have to appear in my local small claims court but turns out i would have to go to hers. 

I have also used quite a few different collection agencies and the person either pays when they get the first letter or typically not at all.

We have had a few clients we have had to chase and it is frustrating, I wish we could do what the banks do, if you leave an account overdrawn you go on a list that other banks can access and deny you an account.  We need a list to share amongst billing companies of clients to avoid.

What I really want to do but I can't is treat this like if you bought a car and didn't pay they would repo it, so we billed your claims and you are now refusing to pay us so I should be able to send in claim retractions and have the insurance companies take the money paid, back.  Even the threat of it might get the deadbeat's attention.

[PMRNC]

What I really want to do but I can't is treat this like if you bought a car and didn't pay they would repo it, so we billed your claims and you are now refusing to pay us so I should be able to send in claim retractions and have the insurance companies take the money paid, back.  Even the threat of it might get the deadbeat's attention.

In an ideal world..unfortunately no, that would put you in a really bad place since no contract in place, no BA agreement (assuming these were all terminated?)

I don't know about you, but principal alone would make me travel to the court, you can add the travel and costs to your suit. IF the amount is over the small claims limit.. file suit anyway, again you can be compensated for travel and costs if you win. If you had a good contract it will be easy win.

[Michele]

Actually we have.  Only for one account because they were out of state.  We did end up collecting but not completely due to Transworld.  We used the Profit Recovery portion which only cost $12.  Then we had to push further.  (Nasty client)  But once they realized we weren't going away they paid.  The reason I recommended it in this case is I was thinking if the client is in another state it would be easier, and also she indicated that she thinks they will pay so I figured Transworld would be the easiest and cheapest route. 

[Lisa@srts-inc.com]

Thanks again for the advice and info, it is very helpful.

I do think i will look into small claims court, i hear Colorado is beautiful this time of year :-)

We have been in business for 24 years and only one time until recently did we have to chase a client for money.  The past year we have had 3. 
Luckily we do have a good contract and I have since added to it to state the client agrees to cover ALL costs if they refuse to pay and account is turned over to collection or an attorney.