Tips for Successful Debt Collection: AzPerLegal’s Best Practices


Debt Collection Paralegal Services in Calgary

Small business owners wear many hats, and unfortunately, one of those hats is that of a debt collector. In some situations, unpaid invoices can become an issue, and when they become months overdue, it is wise to seek assistance from a debt collection paralegal to help collect on the money owed to you. A debt collection paralegal takes debt collection from a more legal angle than a typical debt collection agency.  More care is taken at the outset to pursue recovery of your debt so if litigation (suing) does become necessary, the transition to this course of action is more seamless. 

Collecting Business Debt on Your Own

Depending on the nature and relationship that you have with a particular client who has transitioned into the category of debtor, there are different methods for handling such a debtor.  There is aggressive debt collection and there is more passive debt collection, all dependent on the circumstances of the business relationship between you and your client. Often third party intervention by a debt collection paralegal makes the client realize you are serious about collecting on this debt while it also alleviates the emotional frustration you may be experiencing in the situation.

Debt Collection Letter

If phone calls, emails or account reminders from your accounting software are being ignored, the next step is to send out a debt collection letter, more commonly referred to as a demand letter.  You can send this out yourself, however, it often has more impact coming from a third party such as a debt collection paralegal. Demand letters tend to continue specific information about the invoice, the terms of payment, any interest accruing based on the terms of a signed contract, etc. Depending on the amount of the invoice(s), it is worthwhile to seek out assistance with this from a properly licensed debt collection paralegal agency. 

Should You Walk Away From an Unpaid Invoice?

Whether you walk away from an unpaid invoice depends on the amount of the invoice, the time you have invested in providing services to the client, the nature of the business relationship with the client and sometimes, purely the principle of not being paid. Walking away may also be determined by the client itself. If the client is a business or an individual, it may be worthwhile engaging the services of a debt collection paralegal to perform a few searches to determine whether the client has been sued for unpaid debt, has judgment against it/him/her, has commenced bankruptcy/insolvency, etc. A debt collection paralegal can provide you with significant information which can assist you in making the determination whether to pursue payment or write off the debt. 

How to Avoid the Need for a Debt Collection Paralegal 

  • Establish payment terms upfront
  • If you are charging interest on unpaid invoices, the terms of the interest (how much per month and per year) must be clearly stated AND the client must acknowledge the terms of interest
  • Request a retainer or deposit at the commencement of the services so long as you are licensed to do so;
  • Offer several options for payment
  • Use automated invoices and reminders after the invoice is due
  • Include payment expectations on your invoice
  • Use invoice management software to manage your process
  • Depending on the nature of your business relationship with your client, offer payment terms/cycles more feasible for them
  • Cease services until invoices are paid
  • If you are in construction, file a construction lien within the 60 day time period to protect your interests 
  • Enlist the help of a debt collection agency or paralegal

Debt Collection Paralegal Services in Calgary

Debt collection as a small business owner can be uncomfortable and stressful. AzPerLegal is a licensed, insured and bonded debt collection agency, which means we provide you with the best and most efficient service from start to finish. AzPerLegal is also a paralegal and civil court agency firm so we are in a unique position to assist with debt collection, provide information to assist you with determining courses of action if the client does not pay despite best debt collection efforts and act as your civil court agent should you wish to pursue legal action for debts up to $100,000 through the Alberta Court of Justice.  If your invoices become 45 days past due, we can most effectively collect this debt. The longer you leave the debt uncollected, the more difficult it can be to collect it.

Our debt collection services are unlike any other collection agency because we assess each client on a case-by-case basis and provide our professional opinion on the likelihood of collecting on the debt based on the amount and client. Christine Herrington has over 30 years of litigation experience. She is well-versed in the Alberta Court of Justice process, and if your debt warrants civil litigation, we can assist throughout the process. 

Debt collection is the last thing you want to do as a business owner, so leave it in the trusted hands of the AzPerLegal team. 

Blog posts from AzPerlegal Services Inc. are for general information only. The content should not be considered legal advice. If you are in need of professional legal advice, please reach out to our Paralegal Services team and we can refer you to a lawyer.