main image

5 Steps to Take if Someone Doesn’t Pay You for a Service

Camila Lopez - Unpaid Invoices - March 20, 2024

Client hasn't paid you for work completed? Use our free tool to write a demand letter.

Start Letter


    It is incredibly frustrating when someone doesn’t pay you for a service you completed. 

    In this guide, we will go over 5 steps to take when someone doesn’t pay you.

    Here is a summary: 

    1. Start with a friendly reminder email.

    2. Call your client.

    3. Send your client a demand letter.

    4. Consider suing your client.

    5. Consider hiring a collections agency.

    Did you know we have a free tool powered by AI that helps you create a demand letter to someone who hasn’t paid you? Check out our demand letter tool.

    Step 1: Start with a Friendly Reminder Email

    If someone doesn’t pay you for a service you provided them, start by sending a friendly reminder email. A friendly reminder email gives your client the benefit of the doubt that they are delayed in paying you for the service you completed. 

    Maintain a professional tone that avoids threatening language while being clear about the amount owed and the payment deadline. 

    Here is an example of a friendly reminder email: 

    Dear [Customer Name], 

    We hope this email finds you well. We are writing to remind you of the unpaid invoice on your account. The total amount due is [amount] and the payment deadline was [date].

    We appreciate you taking the time to review this reminder. You can make a payment online at [payment link], by mail to [mailing address], or by calling us at [phone number]. Please let us know if there is anything we can do to help you make a payment. 

    Thank you for your business and cooperation. 


    [Your Signature]

    Step 2: Call Your Client

    If you have not received any response to your emails, try calling your client. 

    During this call, it is important to: 

    1. Provide a friendly reminder to pay.

    2. Understand why your client hasn’t paid. 

    During this call, avoid escalating the problem. Ask questions to understand why they haven’t paid you and use active listening so that you can respond effectively. Ultimately, it is a good strategy to secure a reduced payment amount than no payment at all. 

    Here are some reasons why your client may have not paid you and what action you can consider taking: 

    • Your client thinks you didn’t do a good job: consider offering a discount on the total amount due, or offer to redo portions of the work. Obtaining feedback from your client is very important as it can help you adjust your service offering to prevent problems with future clients. 

    • Your client is having financial difficulty: consider offering them a payment plan or a reduced payment amount.

    • Your client doesn’t understand the invoice: consider explaining the invoice in detail and providing them with copies of any of the applicable documents. 

    • Your client is disputing how much you are charging them: ask them to explain why they disagree with the amount you are charging them and show them the agreement you had originally come to.

    After your call: email your client a summary of your conversation to reduce miscommunication later on.

    Step 3: Send Your Client a Demand Letter 

    Once is clear that your client isn’t going to pay you for the service you provided, it is time to escalate the problem. 

    One way to escalate the problem is to write a demand letter

    A demand letter is a strongly worded letter to your client that lets your client know that you are serious about collecting your payment for the service provided and that you are willing to take legal action to do so. 

    Sample Demand Letter to Someone Who Doesn’t Pay for a Service

    Did you know we have a free tool powered by AI that helps you create a demand letter to someone who hasn’t paid you? Check out our demand letter tool.


    [Client Name]

    Re: Demand for Payment 

    Dear [Client Name] 

    I am writing to you to demand payment for the outstanding balance you owe. The total amount due is [Amount] and the payment deadline has passed. The amount due is because of the following services provided on the following dates: [List the Services Your Business Provided and the Corresponding Dates] 

    I request that you pay the full amount due as soon as you can. I hope to resolve this matter amicably, however, if you fail to pay, I will placed in the position of having to take legal action. 

    Thank you for your attention to this matter. 


    [Your Signature] 

    Pro Tip: Mail and email the demand letter. Receiving a letter in the mail is more formal than just sending an email and may be taken more seriously. 

    Occasionally, you may need to send multiple demand letters if your client does not respond to your first letter. If after multiple demand letters, your client still refuses to pay, you may need to consider filing a lawsuit

    Step 4: Consider Suing Your Client

    When someone doesn’t pay you for a service you have provided you would be suing them for “breach of contract.” When you agree to provide someone a service and they agree to pay you for the service you provide to them, a contract is created. Generally, even if you don’t have the contract in writing, it is still considered a contract.

    If your client doesn’t pay you for the service you have provided, you can consider suing them. The strength of our economy is due to the fact that we have a relatively well-functioning legal system where you can enforce contracts. 

    Where do you start? 

    • Determine if you can sue in small claims court. Depending on how much they owe you, you can consider suing in small claims court (review the maximum amount you can sue for in small claims court in our 50-state guide to small claims limits, the limits range from $2,500 to $25,000). Note, that you will very likely be suing in the small claims court that is closest to where your client is located. If your client owes you more than the amount you can sue in small claims court, you would need to sue in regular court. Small claims court in most states is designed to be user-friendly so that you don’t need to hire an attorney and keep costs low. Once you are in regular court land, the processes get more complicated and you would want to consider consulting with an attorney (you would be looking for a business litigation attorney). 

    • Start collecting your evidence. You want to make sure to save all evidence related to the work you did for the client and any communication you had with the client regarding payment. Evidence to save includes the contract between you and your client, text messages, emails, and any other proof you have of how much your client owes you. 

    If you decide to file a small claims lawsuit: 

    • Continue to seek a settlement with the client. In the time between the lawsuit being filed and the hearing date provided, you can continue to seek a settlement with your client. If a settlement agreement is reached before the hearing date, you can close the lawsuit. Many lawsuits are settled before they reach a judge. 

    • Prepare your evidence.  Make sure to organize your evidence with the appropriate titles, dates, and descriptions of why each piece of evidence is important. Your evidence should aim to show the judge how much you are owed and why your client is supposed to pay. 

    • Prepare what to say. The judge will ask you about the work you completed. Be prepared to explain what services you provided to your client, how much the services cost, and what the client still owes you. 

    Step 5: Consider Hiring a Collections Agency

    If someone doesn’t pay you for a service that is more than the small claims limit and hiring an attorney is out of your budget, you may want to consider hiring a collections agency. 

    Hiring a collection agency may mean receiving less than the full amount owed, but it can be an efficient way to collect your unpaid invoices. You are likely going to pay a portion of the amount that they are able to collect. 

    Benefits of Hiring a Collections Agency:

    • Efficiency: A quality collection agency has developed efficient processes for collecting debts. This can save the business time and money and free up the business time and resources to focus on other aspects of their business.

    • Scalability: Collection agencies are equipped with the ability to scale their services to meet the needs of your business. Please note, that it is common practice for collection agencies to charge a higher percentage rate the smaller the amount collected owed is. 

    Cons of Hiring a Collections Agency

    • Costs: Collection agencies typically collect 20% to 80% of the debt collected which means you would need to write off the remainder of the debt. 

    • Damage Your Business Reputation: If the collection agency you hire uses unethical collection practices, it can damage your business reputation. It is important to verify the reputation of the collection agency you hire and the methods they use to collect. 

    Ultimately, whichever steps you take, you deserve to be paid for the services you have provided. 

    Did you know we have a free tool powered by AI that helps you create a demand letter to someone who hasn’t paid you? Check out our demand letter tool.


    Camila Lopez

    Legal Educator @ People Clerk. Camila holds a law degree and is a certified mediator. Her passion is breaking down complicated legal processes so that people without an attorney can get justice.

    Subscribe for Small Claims Tips