After years of freelancing and usually getting paid, I’ve hit a wall with one client who’s been ignoring me for months. It’s a significant amount I can’t afford to lose.
Considering a collection agency, but I’m unsure if it’s a smart move or just wasting more time and money.
Yeah tried it once and got maybe half back eventually
Been there with a stubborn client who owed me four figures. Here’s what I learned:
Collection agencies typically take 25-50% of what they recover. So you’re only getting half at best.
Before going that route, try these steps:
Small claims was actually faster for me than a collection agency would have been. Cost me $30 to file and I got most of my money back.
Collection agencies work better for businesses with multiple unpaid accounts. For one big freelance invoice, you might lose too much in fees to make it worth it.
Check if the client has money before you hire anyone. Look them up online, see if their business is still running, check their social media. No point sending collectors after someone who’s broke. Skip agencies and file a lien if it’s construction work. For other jobs, threaten small claims first. Most people pay up when they realize they’ll have to take time off work to show up in court. Agencies work but you lose a chunk. Only worth it if the amount is big enough that half is still meaningful to you.
Had to use a collection agency twice over the years. Mixed results honestly.
First time was for about $3K from a client who just vanished. The agency got me $1800 after their cut, which was better than nothing. Took about 4 months though.
Second time was a complete waste. Client had no assets and the agency couldn’t do much. Still charged me upfront fees.
Here’s what I wish someone told me - call the client one more time before you hire anyone. Not email, actually call. Sometimes there’s stuff going on you don’t know about. I’ve had clients going through divorces, business troubles, or just overwhelmed.
If calling doesn’t work, research the agency first. Some are sketchy and some are solid. Ask what their success rate is for your invoice amount. Also ask about upfront costs vs commission only.
One thing that worked better for me recently was sending a formal letter from my business lawyer. Cost me $150 but the client paid within a week. Sometimes the letterhead scares them more than collection threats.
Used a collection agency once for a $2500 invoice. Got back about $1400 after six months. Better than nothing.
Before that, try a text message instead of email. People often ignore emails but read texts. Just say, “Need payment for invoice #123 by Friday or I’m sending to collections.”
If that fails, find an agency that charges only if they collect. Some ask for upfront fees which is risky if your client has no money.