In some cases, demand letters or negotiations can result in satisfactory payment or settlement of business-to-business debts. However, under certain circumstances, filing a debt collection lawsuit against the debtor in civil court may be necessary. If such litigation is necessary, you need to be sure you have a qualified B2B collections attorney handling your case to ensure the most favorable results for you.
If your business is owed money — especially if it is a substantial amount of money — you can experience serious issues with your operations. Pursuing litigation to get your money back might sound daunting, but the right business attorney can guide you through the process.
When Should You File a B2B Collection Lawsuit?
Just Because You Can File a Lawsuit, This Doesn’t Always Mean You Should
If you have tried repeatedly to get a business to pay back the money they owe you and have gotten nowhere, it may be worth filing a B2B debt collection lawsuit. However, legal action can be costly and time-consuming, so it’s in your best interests to make sure the other business will actually be in a position to repay you. If any of the following are true, there’s a good chance that the business may not be able to pay back the funds it owes you:
- The business is no longer operating.
- The business has filed for bankruptcy.
- The business does not have the assets or cash flow to repay the debt.
There’s no law against pursuing legal action against someone who can’t pay. However, even if you do get a judgment against the other business, the judgment accomplishes nothing if the company doesn’t have the funds to pay you. When you work with us, our team can investigate the other business to determine whether a debt lawsuit is likely to be fruitful.
Overview of the Lawsuit Process
Business Litigation Can Be Complex, but We’ll Be With You Each Step of the Way
The process involved in pursuing a debt lawsuit is complex. There are many more details than many people realize, and the way you have to file the lawsuit (as well as the deadlines you must follow) may vary depending on your county of residence. Your lawyer will explain in more detail, but here is a brief overview of some of the steps involved:
Filing the Complaint
In a lawsuit, the “complaint” is a detailed document explaining why you’re suing the other party. It sets out who the claim is against, explains the reason for the lawsuit (the unpaid debt), states the total amount you are seeking to satisfy the debt, and more. The complaint will need to be filed with the appropriate court and sent to the business that owes you.
Service on the Other Party
Before further legal action can be taken, the other party needs to understand that there’s been a lawsuit filed against it. Once your attorney has drafted the complaint, that document will be served on the other party. The other party will also be served a summons, which is a document ordering its representatives to come to court.
The Other Party’s Response
Once the other business receives the complaint and summons, it has a set amount of time to respond to the lawsuit. In the response, it can confirm or deny the claims in your complaint, and it may also file counterclaims against you. Sometimes, at this point, the other party will reach out and offer to settle the debt. If the other party does not respond or show up to court, you can obtain a default judgment against it, usually for the amount you requested.
The Discovery Phase
At this point, each party shares the evidence it has with the other. That evidence can include proof of the debt as well as any other relevant documentation.
Negotiations
Most debt collection lawsuits are settled out of court. In virtually every case, your lawyer will talk to the other company’s lawyer in an effort to try to come to a mutually agreeable settlement arrangement. If you reach a settlement, the other party pays, and you agree to drop the lawsuit. You also agree to not pursue further legal action related to the same debt.
Trial
If no negotiations are possible, you will have a trial to determine whether you can obtain a judgment or not. In this situation, you go through a civil trial. It works similarly to a criminal trial. However, instead of determining whether the defendant (the business that owes you money) has committed a crime, the judge or jury must determine whether the business legally owes you money. If you win, you get a judgment against the other party, meaning the business is court-ordered to pay you back. Once you have a judgment, you may be able to use more aggressive collection actions to recover your money.
Are you considering filing a debt collection lawsuit against a business that owes you money? Call Weisblatt Law Firm at (713) 666-1981 to set up a free consultation.
Consult With an Experienced Houston Business Litigation Lawyer Today
If you are pursuing business-to-business debt collection without success, litigation may be necessary to obtain the judgment you deserve. Because the civil lawsuit process can be complicated and involves many different rules and requirements, it is imperative to have the representation of an experienced B2B collections lawyer. Andrew Weisblatt has extensive experience in all types of business litigation matters in and around Houston, including debt collection litigation.
When you enlist the help of a lawyer in collecting what you’re owed, the business that owes you money will see that you’re serious — and it may even pay up before you have to file a lawsuit. Let Weisblatt Law Firm help you recover the funds you’re owed. Call us at (713) 666-1981 now for a free phone consultation.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
