What legal actions can a small business owner take if a customer does not pay their invoice in Illinois?

Legal Actions for Small Business Owners in Illinois for Unpaid Invoices

As a small business owner in Illinois, there are several legal actions that you can take if a customer does not pay their invoice. Here are some options:

1. Send a Written Demand Letter

The first step in attempting to collect an outstanding invoice is to send a written demand letter to the customer requesting payment. The letter should state the amount owed, the date the payment was due, and the consequences of not paying. It is important to keep a copy of the letter for your records as proof of your efforts to collect the debt.

2. File a Lawsuit in Small Claims Court

If sending a demand letter does not result in payment, you can file a lawsuit in small claims court. Small claims court in Illinois handles claims up to $10,000. The lawsuit should include the original invoice, proof of delivery of goods or services, and any other relevant evidence supporting your claim.

3. Hire a Collection Agency

You can hire a collection agency to assist in collecting the debt. A collection agency will typically charge a percentage of the amount collected, and may not be effective if the customer has no assets or income to pay the debt.

4. Place a Lien on the Customer’s Property

If the customer owns property, you may be able to place a lien on the property. This means that if the customer tries to sell the property, the debt will need to be paid before the sale can be completed. However, placing a lien can be a complicated process and may require the assistance of an attorney.

It is important to note that there are limitations and exceptions to these options. For example, there is a statute of limitations on debt collection in Illinois, which is typically 10 years from the date the debt became due. Additionally, if the customer has filed for bankruptcy, there may be restrictions on your ability to collect the debt.

In summary, a small business owner in Illinois has several options for collecting an unpaid invoice. However, it is important to understand the limitations and exceptions to these options and to seek the assistance of an attorney if necessary.