If another company owes your company money, chances are you want to collect on that debt as soon as possible while still preserving the business relationship whenever possible. While some debt collectors are unnecessarily aggressive, the collection process does not have to involve harassment and such aggressive threats of litigation.1 In fact, there are many other methods of business-to-business (B2B) debt collection that may be used without dragging the other business owner into court.
The importance of a demand letter
The first step in a B2B collection attempt is generally to send a demand letter for voluntary payment of the debt. If carefully and persuasively composed, this letter can often be enough to incite payment without having to take further action. Even if you have already sent many invoices and letters on your own, having an official demand letter come from a B2B collections lawyer may be taken more seriously as it demonstrates you have taken steps toward potential litigation.
A demand letter aims to achieve the following:
- Officially inform the business owner that the debt is being collected by an attorney;
- Request a response regarding the debt to determine whether the business is denying the debt, refusing to pay, or simply cannot pay;
- Giving the business owner an avenue to discuss possible alternative arrangements for paying the debt, including payment plans or partial debt forgiveness for a lump sum.
- Inform the business owner that litigation is a possibility if they fail to respond.
If a business responds to a demand letter, an attorney can gather information even if they are unable to settle the debt at that time. Often, the idea of litigation is enough to incite the debtor to at least discuss payment options.
Discuss how a Houston B2B collections attorney can help you
Andrew Weisblatt is a qualified business litigation attorney in Houston who has extensive experience assisting companies with business-to-business debt collection. The collection strategy will be specifically tailored based on your particular situation, including the nature and amount of the debt, the business ties involved, and more. If you need assistance, please call a B2B collection lawyer at The Weisblatt Law Firm, LLC at 713-666-1981 as soon as possible.