- Review your Contract with this Client:
Your agreement with your client needs to be signed by all parties, address the client, program being purchased, and total purchase price, as well as any payment plan the client would be using. Ideally, the payment plan is also clearly outlined, stating the amount of each payment, date each payment is due, and total number of payments to be made.
(If your contracts do NOT have this information in them, CLICK HERE for my Client Agreement template with payment plan addendum, or CLICK HERE for the full beginners’ legal bundle for all 6 templates, including the Client Agreement)
- Reach out to them via email (or any written communication)
Here you want to address things like (1) the contract they signed, as well as the date they signed it, (2) the paragraph within the contract that discusses payment, and that they became obligated to pay for the program in full when they signed the contract, (3) that they are in “breach” of the agreement by allowing their payments to become delinquent; (4) you may be forced to take further legal action if the amount is not paid by the date it is due, per the contract.
Depending on the nature of the coaching or program they purchased, you may also want to consider removing them from any programs or services that they are no longer paying for, or should no longer have access to due to their failure to pay for the services.
- Contact a Local Attorney
If you still have not been able to collect, it may be beneficial to reach out to a business attorney in your state, to see if it would be worthwhile to have their firm send your client a similar demand letter. Often times the same information from a lawyer on law firm letterhead is enough to scare anyone into paying, to avoid legal trouble.
- Reach out to a Collections Agency
If filing a lawsuit or claim in small claims court isn’t how you’d like to handle the matter, you can look into whether hiring a collections agency may be a good fit. There are several different types of agencies – some that buy the debt from you, and others that take a percentage of the total bill you’re trying to collect on. Some may also have additional fees, some may only charge you if they collect the debt, while others bill you whether or not the money is collected. If you’re interested in going this route, look at the total outstanding balance (if it’s $1,000 vs. $30,000 that may change whether it’s worth hiring an agency to help collect), as well as your goals in hiring an agency. If you do speak with an agency, make sure you review ALL costs and fees prior to hiring them, to make sure you understand the relationship, and what they will be paid.