Tips for recovering payment for completed snow work

You’ve completed your end of the deal, but now your client refuses to pay up. What do you do? Your business almost definitely relies on that payment—but even if it doesn’t, you’ve put in time and effort to complete a service, and you deserve to be paid for your hard work.

So, what now?

There are several courses of action you can take to recover these funds. However, before pursuing any legal path, ask yourself:

1. How much money are you owed?
2. Is there a way to obtain the amount owed through informal means?
3. Do you want to maintain this business relationship?

For any business transaction, burning fewer bridges is better. It’s always smart to start by directly reaching out to the party that owes you money and asking them to pay. Sometimes nonpayment is the result of a misunderstanding or oversight. Keep your tone professional and document all communications—emails and texts can become valuable evidence later if things escalate.

Going to court

If that initial conversation doesn’t work, as it frequently doesn’t, the next step depends on your situation. But as a general rule, if somebody won’t voluntarily pay what they owe, you must force them to pay through the courts and through judgments for money.

While I always recommend having an attorney involved, whether you are required to can be a matter of state law. In Minnesota, for example, companies are required to be represented by an attorney in District Court, but not in small claims court. Therefore, the amount of the debt owed matters. Your state law determines what claims can be brought in small claims court and generally has a dollar amount attached to it (e.g., no amounts owed over $20,000 can be brought in small claims court). And if you need to get an attorney involved, hopefully you have a contract that allows you to recover your attorney’s fees and costs in collecting the amounts owed.

Assuming you are forced to proceed in court, it’s important to keep in mind that some people and/or companies are challenging or impossible to collect from, even if you get a judgment. Remember, a judgment is, at its core, an order from the court allowing you to collect from the judgment debtor. But if the judgment debtor is insolvent or bankrupt, all these actions, time and money spent seeking to collect the funds owed can be for naught. So, it really takes a case-by-case analysis.

Recovering payment for completed work can be frustrating and time-consuming, but you don’t have to accept nonpayment as the final outcome. You strengthen your chances of collecting what you’re owed when you stay professional, document your efforts, and follow the proper steps from directing communication to formal legal action. If you’ve held up your end of the agreement, you have a right to expect payment.

Before taking action on your own, you should consult with an attorney to ensure the steps you plan to take are appropriate given the specifics of your situation. 

If your contract structure is such that you are invoicing during the season (e.g., monthly installment plans, after each event, etc.), make sure you have language that addresses repercussions for non-payment, such as late fees, suspension of service until the account is current, or termination of the account. The contract should include language that the client is liable for any incidents that occur onsite while service is suspended.

Jared Nusbaum is an attorney with the law firm Zlimen & McGuiness, PLLC in Roseville, MN. His practice areas include business law, business litigation, collections, and bankruptcy. Email him at jnusbaum@zmattorneys.com. Elizabeth Sammon is an attorney with the law firm Zlimen & McGuiness, PLLC in Roseville, MN. Her practice areas include estate planning and estate administration.