When a customer will not pay

The job closed out in April. You sent the invoice, then a reminder, then a second one, then you called and got voicemail twice. It is now August, the customer has stopped replying, and the balance is $4,200. Another polite email is not going to change anything.

If you are still in the reminder phase, stay there. What follows is for when it has stopped producing a payment date or a real response.

Price the recovery before you chase it

Every route below costs money, time, or both. On small balances the cure can cost more than the debt.

On that $4,200 invoice, an agency at 35 percent nets you about $2,730 if it collects in full and nothing if it does not. Small claims costs a filing fee, a process server, and a working day, and you keep the whole judgment — if you can enforce it. On a $400 balance neither pays for itself: send a firm demand letter and decide whether that customer ever gets another job.

Two questions belong in the math before any of it. Is the debt undisputed, or is the customer withholding because they say the work was wrong? And is there money to collect at all? A judgment against someone with no assets and no wages is an expensive piece of paper.

Send one final demand letter

The demand letter is the hinge. It is the last cheap step, it often works on its own, and every route after it goes better because you have it.

Keep it short and unemotional: the amount, the invoice number and date, the work, any late fee your signed agreement authorizes, a deadline, and what happens the day after.

Invoice 2026-0736, dated May 4, 2026, for $4,200 remains unpaid. The work was completed on April 29 and accepted without objection. Payment in full is due by September 8, 2026. If I have not received payment by that date, I will refer this account for collection and pursue the remedies available to me, including suit for the balance plus any interest and costs the contract and applicable law allow.

Send it by certified mail with return receipt requested, and email a copy the same day. Proof of delivery is what stops "I never got anything" from working later. Ten to fourteen days is a common deadline — and a deadline you let slide teaches that customer your deadlines are decorative.

An attorney's letterhead does the same job with more weight, often for a flat fee. On a mid-size balance that is frequently the cheapest thing that works.

The clocks that limit your choices

Two deadlines are set by state law, not by you.

Statute of limitations. A claim on a written contract has to be filed within the period set by the applicable state law. The period can differ for oral agreements or open accounts. Get the actual deadline before relying on it.

Lien and notice deadlines. These are the short ones, and the ones contractors lose. On real-property work the window to preserve a mechanic's lien is often measured in weeks or a few months from your last day of work, and some states also require a preliminary notice near the start of the job.

Get the real periods for your state from an attorney licensed there, before you need them rather than the week you decide to act.

Collection agency: what it costs, what you hand over

An agency takes over contact with the customer and remits what it recovers minus its cut. Get the fee schedule in writing before you assign anything, and read what happens if the customer pays you directly afterward. Some agreements still charge a commission.

What an agency does not have is legal power. Without a judgment it can seize nothing and garnish nothing, same as you. What it has is time, scripts, and a name the customer does not recognize.

Two constraints. Federal debt-collection law governs how third-party collectors may contact consumers, so a residential account is worked under rules a business-to-business account generally is not, and an agency that ignores them creates a problem for you too. And most states license collection agencies — confirm yours is licensed where your customer is.

Small claims court, and what a judgment is worth

Small claims is built for exactly this: a clear debt, modest size, no lawyer. You file, pay the fee, arrange for the defendant to be served, and present your paperwork in a hearing usually measured in minutes.

The dollar cap is the whole question, and it varies enormously — from a few thousand dollars in some states to $25,000 in others. Some states bar attorneys in small claims; some require an LLC or corporation to be represented rather than appear through its owner. The clerk of the court in the county where you would file is the only authoritative source for the cap, the fee, and the appearance rules.

Bring the documents, not the story: the signed estimate or quote, signed change orders, the invoice, the delivery receipt for your demand letter, photos of the finished work, and any message where the customer acknowledged the work or promised to pay.

Then understand what winning gets you. A judgment is not money, it is permission to pursue money — through wage garnishment, a bank levy, or a judgment lien recorded against property, each with its own procedure and cost. Plenty of contractors win and never collect, which is why the solvency question belongs at the start.

Mechanic's lien, when the work was on real property

If you improved real property — built, remodeled, roofed, wired, plumbed, landscaped — most states give you a lien right against that property for the value of your work. It is the strongest tool a construction trade has, because a lien clouds the title and surfaces the moment the owner tries to sell or refinance.

It is also the most technical. The filing has required content, notarization in many states, recording in the county where the property sits, a short deadline, and a separate, also-short deadline to sue before the lien lapses. Miss a formality and you may lose the right entirely; overstate the claim and you can create liability of your own. This is a construction attorney, not a downloaded template.

The file every one of these routes needs

The paperwork is not just evidence, it decides which article you are reading. A documented acceptance is a collection. An undocumented verbal add-on is a dispute, and no demand letter fixes that.

So build the file while the job is going well and nobody is arguing. Keep the estimate, the approval, and every change order in one place per job in DoneQuote, so when a balance goes quiet in August you can pull the April paperwork in a minute instead of rebuilding it from your phone.

One last thing to ask your CPA before you write a balance off: if you report income on the cash basis, an invoice you never collected was never income, so there is usually nothing to deduct. The write-off is not the consolation prize people expect.