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What legal action can I take as a small business owner in New York if a customer refuses to pay for goods or services that they have received?

Picture of Chris Battis By   ·  1 minute read

As a small business owner in New York, if a customer refuses to pay for goods or services that they have received, you have several legal actions available. Here are some options:

  1. Send a demand letter: Before taking any legal action, it is advisable to send a demand letter to the customer, specifying the nature of the debt, the amount owed, and the deadline for payment. This letter should be sent by certified mail, return receipt requested, to create a paper trail.

  2. File a lawsuit: If the demand letter does not result in payment or a satisfactory response, you can file a lawsuit against the customer in a New York court. You will need to hire an attorney to prepare and file a complaint, which sets out the legal and factual basis for your claim, and pay a filing fee. The court will then issue a summons to the customer, who will have a specified period of time (usually 20-30 days) to respond to the lawsuit.

  3. Seek a judgment: If you win your lawsuit, the court will issue a judgment for the amount owed, plus interest and any applicable court costs or attorney's fees. This judgment can be enforced by various means, such as garnishing the customer's wages, placing a lien on their property, or seizing their bank account.

  4. Use alternative dispute resolution: You may also consider using alternative dispute resolution methods, such as mediation or arbitration, to resolve the dispute without going to court. These methods tend to be quicker and less expensive than litigation, but they may not be suitable for every situation.

It is important to note that there are some limitations to these legal actions. For example, if the customer has filed for bankruptcy, your ability to collect on the debt may be limited. You should also be aware of any time limits for filing a lawsuit, which are set out in the New York statute of limitations.

In any case, it is highly recommended that you consult with a licensed attorney who can assess the specific facts and circumstances of your case and offer tailored legal advice.