Trying to Collect a Debt to Your Business? Follow These Steps.
We understand that you work hard on behalf of your customers. We work just as hard on your behalf to ensure that you are properly compensated when money is owed to you and your Texas business. Are you having trouble collecting a debt? Get in touch. We can help you understand your rights and guide you in the process of getting fair compensation. One of the most frustrating parts of running a business can be ensuring that you are paid fairly and in full when your services are rendered. If a client has failed to pay his bills, Texas law has specific procedures to follow to help you collect the debt and to be made whole. By following the steps prescribed by law, you can increase your chances of a positive outcome.
Step one: The collections letter.
A collections letter, also called a demand letter, is the first step to collecting a debt. The letter should include the name of the creditor, the amount owed and an opportunity to verify or dispute the debt. It is also common to include a deadline before which you expect a response. While a demand letter is not legally required in Texas before going to court to collect a debt, it can spur the debtor to pay in full and avoid future debt-collection activity.
Step two: A collections lawsuit.
If attempts to collect a debt are unsuccessful, the next step is to take the complaint to a court of law. The process involves filing a petition in civil court asking for a judgment against the debtor. The defendant can then, if he wishes, file an answer, an affirmative defense or a counter-claim. The judge will make a decision based on the evidence brought by you and your lawyer, as well as evidence from the defendant. However, if you prevail in court, that is not the end of the story. A money judgment acts as a lien on property in the state of Texas. However, you may have to take additional actions to collect on a debt.
Step three: Enforcing the judgment.
In Texas, creditors have several paths available to collect on a debt that has been affirmed in court. Seizing a bank account can often be the most effective way to collect a debt. You can also have the sheriff force the sale of assets — including vehicles, real estate and other personal property. In Texas, wages cannot be attached for the payment of a debt. Having a skilled attorney to help you navigate collection is the best way to ensure that you are able to get what you are owed.
A judgment in Texas is valid for 10 years. This gives you ample time to try multiple avenues for collection. By working with someone with the legal knowledge to help you assert your rights, you can choose the best path forward to make you and your Texas business whole.