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Navigating the challenge of clients who refuse to pay their bills

On Behalf of | Aug 1, 2023 | Business Litigation |

Running a successful business often involves managing challenging situations, including dealing with clients who refuse to pay their bills. It is a frustrating and, unfortunately, all too common occurrence.

Clients refusing to pay their bills can lead to cash flow problems and can hurt your bottom line. In such situations, you have various options at your disposal. Each of these methods focuses on ensuring your business receives payment while maintaining client relationships as much as possible.

Clear communication

Your first course of action should be to communicate with the client. There could be a misunderstanding or dissatisfaction with the product or service. Find out why they are refusing to pay and work towards a resolution. Always remember to keep your communication professional and respectful.

Payment plans

If a client cites financial difficulties as the reason for non-payment, you might want to consider offering a payment plan. This approach allows the client to make smaller, more manageable payments over time, and it helps your business recoup the money owed gradually.


If communication and negotiation efforts fail, consider mediation. A neutral third party can help facilitate a discussion between you and the client to reach a mutually agreeable solution. Mediation often works well because it is less confrontational than a legal proceeding.

Small claims court

When all else fails, you may have to take the matter to small claims court. Small claims court in New Jersey can handle disputes involving amounts up to $3,000 (or $5,000 in the case of the return of a security deposit). Make sure you have all your documentation in order, such as contracts, invoices and proof of work completed.

Clients who refuse to pay their bills pose a significant challenge to any business in New Jersey. However, understanding how to handle this delicate matter can help you maintain professionalism while working toward a resolution in New Jersey.