How to Handle Delinquent Customers as an Arizona Business Owner

It is not uncommon for business owners to find themselves in a situation where they have a customer or client that has not paid their bill.  These delinquent customers and clients can have a significant impact on your bottom line and put your business at financial risk if they do not pay for the services rendered.  The legal process for handling delinquent customers in Arizona mostly depends on the dollar amount in question.  However, it is generally a good idea to exhaust other options before pursuing a collection claim in court.

Demand Letter for Delinquent Customers

It might be tempting to continue calling a customer or client that hasn’t paid their bill to request payment, but this is generally not the best path forward and may be put you in legal jeopardy if he or she claims they are being harassed.  If you have worked with the client or customer for a long time, you can start the process with a simple phone call to inform them there is a debt that needs to be paid.  You will want to keep the call short and professional.  It will not help your goal of receiving payment to turn it into a personal argument.

If the phone call does not result in payment, then you will need to send a demand letter that clearly states what services were rendered or what products were delivered.  The letter should include the exact amount that is past due and a deadline for payment.  If you know the customer or client is facing financial difficulties, it might be wise to offer to settle the delinquency for less than what is owed.  Our firm can draft a professional demand letter and make sure that it contains all necessary information.

Filing a Lawsuit for Delinquent Customers in Arizona

If the debt is less than $3,500, then you can file a claim in small claims court in Arizona.  This process can typically be done without an attorney.  The majority of cases in small claims court are small businesses that are not represented by an attorney.  Our firm can help you with the process or advise you on the best course of action, but small claims court is designed to eliminate the need for an attorney.

For debts between $3,500 and $10,000, you will be required to use the Justice Courts in Arizona.  Collection cases are a part of their civil jurisdiction.  These cases will involve normal courtroom proceedings and you could be at a significant disadvantage if you attempt to represent yourself in these cases without any knowledge of the process and laws that apply to your case.

For debts of more than $10,000, you will be required to file a civil complaint in Superior Court in Arizona.  Our firm can help you prepare and file a claim for any debt of more than $10,000 in Superior Court in Arizona.  You will be unlikely to achieve a favorable outcome in Superior Courts without experienced legal representation.

MacQueen & Gottlieb has represented clients with various types of debt collection claims in Arizona.  We can provide legal advice for smaller claims or prepare and pursue a claim to a verdict for larger amounts in Justice Courts or Superior Court in Arizona.  Contact us today to schedule an initial consultation about your delinquent customer or make an appointment online.