How to Collect Money from Clients Who Won’t Pay

In this blog, we’ll discuss how to collect money from clients who won’t pay.

A Guide on How to Collect Money from Clients Who Won’t Pay

how to collect money

As a business owner, you have almost undoubtedly faced clients who will not pay, and if you haven’t yet, someday you likely will. Fortunately, you have several tools at your disposal to collect money owed to you. However, there are also laws for how to collect money that you must follow to avoid even greater misfortunes than not getting paid.

Make a Simple Phone Call

It may not take much at all to collect money from clients who owe you, especially if there is a legitimate and innocent reason why someone has not paid yet.

Perhaps, for instance, they forgot they still owed you money. Maybe they mistakenly thought they or another member of their family had already taken care of it.

Maybe they have been hit by an emergency and have been so caught up with health misfortunes that they neglected to contact your organization and request an extension. In all these cases, making a simple phone call to inquire about the matter may be all it takes to get you your overdue payment.

Send Another Bill

Your organization can also send a simple invoice statement, perhaps again, or a polite collection letter asking for the payment owed. If this fails to produce any form of communication that leads to being paid, your organization can also use an attorney.

Under CFPB rules, organizations may also utilize the services of attorneys in efforts to collect on debts. It is important to note, those attorneys are not required to have “meaningful involvement” in a collection case to send letters. In short, this means an attorney is not required to be actively involved in the collections process.

Offer Alternative Payment Options

If your client seems to still take responsibility for the debt owed to you but balks, for whatever reason, at paying the entire amount due at once, you can meet the client in the middle by suggesting alternative options for payment.

Payment Plans

Offer a reasonable payment plan option, for instance. Ask the client what they can afford to pay monthly and see if you can make that work. Pick a payment date together that works for both of you. Demonstrating a bit of flexibility on behalf of your organization can go a long way toward eliciting cooperation on your client’s part.

You can even suggest that clients set up monthly recurring payments so they can meet their payment obligations without having to remember them every month.

Many clients are already well-familiarized with automated payments these days, but you cannot assume that everyone is. Point out how the client has a great deal of control to manage automated payments on platforms that enable them.

Getting a client to set up an automated payment plan is one of the surest methods for how to collect money confidently and reliably. And today, many quality payment platforms offer recurring payment functionality out of the box.

Hire a Collection Agency

In many cases, when a client is unreachable or adamantly refusing to pay, it is common to hire a collection agency. Just be aware, if you do decide to go this route, that individuals and agencies falling under the legal classification of “debt collector” according to the CFPB, are beholden to far stricter rules about debt-collection practices than you are as the original creditor.

For instance, the rules of the Fair Debt Collection Practices Act (FDCPA) prohibit debt collectors from using deceptive, abusive, or unfair practices to collect that debt. By contrast, the rules of FDCPA do not apply to original creditors, not that you would resort to such practices, but it serves as a pointed example.

Other rules restricting the actions of debt collectors include:

  • They can only contact a debtor to collect on a debt a maximum of seven times each week.
  • Any text messages or emails they send must provide actual notice of the debt in a “reasonably expected” manner and in a format the debtor may retain and access at any time.
  • Contacting a debtor through social media messaging is strictly prohibited if other members of the platform can see the messages.
  • They must provide debtors with a “reasonable and simple method” of opting out of the communications.


If professional debt collection still does not work, or the thought of paying for such services does not appeal to you, there’s always professional arbitration to turn to. It is a less adversarial alternative than simply suing the client next in small claims or even superior court. You may be more successful in reaching an agreement together that appeals to you both in arbitration than by letting an independent judge make all those decisions for you.

Moreover, if your contract or client agreement with this client contains an arbitration or dispute resolution provision requiring pursuing arbitration before or instead of court, your hands may be tied to this alternative.

An arbitrator is an independent third party whose role is to help two parties reach an agreement in a dispute. The arbitrator does not make any decisions for either party, but rather simply mediates and facilitates a more thoughtful and respectful negotiation between the primary parties. Other advantages of arbitration over the courts for collecting money include that it is generally faster, cheaper, and more informal.

Recap: Collecting Money from Clients Who Won’t Pay

When a client will not pay, you have several tools at your disposal with which to collect that money, among them are payment plans, collection agencies, and arbitration.

Sometimes, it is simply a matter of making a phone call or suggesting useful payment options, like automated recurring payments. Other times, you may need to bring in bigger guns, like an attorney, collection agency, or arbitrator.

Interested in offering your customers flexible payment options from a fast and secure mobile-first payment platform? Chat with us.


1. Are there laws that limit what debt collectors can say or do? (2017, January 30). Retrieved March 21, 2021, from

2. FDIC law, Regulations, related acts. (2016, August 31). Retrieved March 21, 2021, from

3. Fishman, S. (n.d.). Get Clients to Pay Up. Retrieved March 21, 2021, from