In theory, doing business in South Florida should be simple. You provide a product or service to a customer – and then you get paid. In reality, it’s not that easy. So what can you do as a business owner when you fulfill your end of the bargain but your customers don’t pay? Keep reading to find out.

Is it really worthwhile?

Before you do anything else, talk to your lawyer about whether taking formal action against your customer is really worthwhile. If the cost of litigation is significantly greater than the amount owed, you may want to think twice. You may also want to consider other options if your customer is unable or unlikely to pay up due to overwhelming financial distress.

Your attorney and qualified financial professionals can help you calculate how much an individual or business owes you by reviewing unpaid bills and any other relevant material. They can also evaluate your customer’s financial situation based on:

– The value of “fixed assets” that they have such as vehicles, equipment, machinery, and so forth;

– How much cash they have on hand;

– Available inventory;

– Real estate holdings;

– Corporate holdings;

– Money owed and received; and

– Outstanding debts/liabilities.

Based on their findings, your lawyer will provide the information you need to make an informed decision.

Giving the Customer One Last Chance

If you decide to proceed, your lawyer will draft a document called a formal or final demand for payment. Although the contents are partially based on your unique circumstances, there is also a generic language that must be included. It explains:

– Why the customer must pay;

– How much is owed;

– The deadline for remittance of all past due payments; and

– Legal consequences for failure to comply.

Assuming the customer refuses to meet the specified deadline, you can seek the legal intervention stipulated in the demand letter.

Resolution of the Matter in Small Claims Court

One option if the customer doesn’t owe you a lot is to seek resolution of the matter through a small claims court. In many ways, this is much easier than taking the dispute to a civil trial court. For one thing, it is less intimidating. Secondly, you don’t necessarily need a lawyer. Finally, the judgment is usually rendered quickly and rights to appeal are generally restricted.

In Florida, you can only pursue legal recourse in small claims court under certain circumstances. Specifically, you must be at least 18 and the amount you are trying to recover cannot be greater than $8,000.

Resolution of the Matter in Civil Trial Court

A civil trial court is an appropriate forum if the customer owes you more than $8,000. While you can also represent yourself in this setting, there are a few things to keep in mind. First, this is a much more formal setting, where there are specific rules dictating how your case is presented. Failure to present your case properly can have costly and unpleasant consequences. In fact, it may keep you from recovering the money owed.

In one documented case, the business trying to recoup outstanding debt tried to do so using a legal theory that didn’t apply to the circumstances of the case. Although the plaintiff prevailed at trial, the 4th District Court of Appeal ruled against the business and directed the trial court to find for the defendants.

More importantly, if you file the lawsuit in the name of the business, rather than yourself individually, Florida law mandates that you be represented by an attorney. Accordingly, it is always prudent to consult an attorney with experience in business or contract law before pursuing any legal action on your own. If you win the lawsuit, you may even be entitled to recoup any attorney’s fees and costs spent in litigation.

If you’re not being paid, a lawyer can help recover the money owed.

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