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What legal steps can I take if a customer refuses to pay for services or goods they received from my business in Pennsylvania?

Picture of Chris Battis By   ·  1 minute read

If a customer refuses to pay for services or goods they received from your business in Pennsylvania, there are several legal steps you can take to try to recover the debt owed to you.

  1. Send a demand letter: The first step is to send a demand letter to the customer stating the amount owed, the reason for the debt, and a specific deadline for payment. The demand letter should also state that legal action will be taken if payment is not made by the deadline.
  2. File a claim in small claims court: If the customer still refuses to pay after receiving the demand letter, you can file a claim in small claims court. In Pennsylvania, small claims court allows claims up to $12,000. To file a claim, you must complete the appropriate forms and file them with the clerk of court in the county where the customer is located.
  3. Hire a collection agency: You can also consider hiring a collection agency to collect the debt on your behalf. Collection agencies are experienced in debt collection and can negotiate with the customer to try to reach a settlement.
  4. File a lawsuit: If the debt owed is more than the small claims court limit or the customer disputes the debt, you can file a lawsuit in a Pennsylvania court. This option is more time-consuming and costly than small claims court, but it may be necessary to recover a larger amount of money.

It is important to note that there are some limitations to these legal steps. In Pennsylvania, there is a statute of limitations of four years for contract disputes. This means that you must file a claim or lawsuit within four years of the customer's refusal to pay, or you may lose your right to collect the debt.

In addition, if the customer has declared bankruptcy, you may not be able to collect the debt owed to you. If this is the case, you should consult with a bankruptcy attorney to determine your options.

If you are unsure about the legal steps to take in your specific case, it is recommended that you consult with a licensed attorney who can provide legal advice tailored to your situation.