What To Do When Client Refuses To Pay

You know that moment when your client refuses to pay their invoice, cancels their subscription payments, or ignores your payment reminders? And, you didn’t actually have the legal pieces in place to do something about it?

Well, sh*t. That’s rough.

If a client owes and is refusing to pay for work you’ve already done or work they’ve already committed to paying, I just want to take a moment to give you a virtual hug. There’s nothing worse than already providing services or saving space for a future client only for them to ghost you on payment.

And what’s worse? You might have just had a client refuse to pay and then you’re not even sure what you’re allowed to do about it. That’s where I’m hoping to help!

I’ve already addressed what to do when a client refuses to pay you — but it’s equally important for you to know what to do in advance so you have ALL of the pieces of information you need from a client to be able to successfully get paid.

Otherwise, you’re always left on the defense — but you might not have the pieces you need to go on the offense. You know what I mean!?

So what’s the non-payment of invoice law then? In order to successfully collect payment when you’re dealing with clients who refuses to pay their invoice, you’ve got to have these 3 things:

What To Do When Client Refuses To Pay

1️⃣ What Information Do You Need From Clients? 

To send a client to collections who refuses to pay their unpaid invoice, you need to have the right client info to collect payments. This includes:

👉full legal name, not a nickname or alternative name.

👉Mailing address

👉Contact phone number (helpful but not required!)

👉Email (helpful but not required!)

👉Bonus info: birthdate

You can easily add these fields to your onboarding system (like Dubsado (affiliate link), Honeybook, or Practice Better) so that you collect this information from your clients as they come on board.

2️⃣ How Do You Avoid Chargeback Theft?

You need a no chargeback threat policy in your contracts, terms, checkout policies etc that prohibits people from contacting their bank/credit card/PayPal to ask them to get the money back. If you don’t have a “no chargeback threat” policy in your contracts and policies, you don’t really stand a chance at fighting one. You could have to deal with a chargeback theft. 

FYI: All of my legal contract templates include this language!

3️⃣ What Payment Terms Do You Need In Your Client Contract?

Does your contract clearly state what happens when they miss a payment? Does it clearly state the due date? Or what happens after 30 days has passed? What about if they owe the payment upfront or if there are payment plans in place? It might seem like a no-brainer to get paid invoices on time, but if your contract doesn’t say anything about late/missed/overdue payments, now’s a good time to make sure you add in language to protect yourself the next time. If you have a legit client contract with all the right legal pieces in it, you’ll be able to successfully send the non-payer to collections (either via a debt collections agency, or a lawyer who does collections work). They’ll fight on your behalf to get what you’re owed, typically for a percentage of what’s collected (or a flat fee). They don’t always collect 100% of the amount of money that you’re owed, but they can try. Another option if nothing else is successful, is to take your client to small claims court.

Either way, without this stuff ^, you’re SOL.

And if you’re like — WAIT, where do I get contracts THIS good?! I’ve got you.

How To Get Ongoing Legal Tips

I’m Sam, an attorney-turned-entrepreneur who helps online coaches and service providers legally protect and grow their online businesses using my DIY Legal Templates and the Ultimate Bundle™️.

Basically, I help you get legally legit™️ so you can get paid on time, work safely with clients, and confidently grow your business. I have a free legal workshop called “5 Steps to Legally Protect & Grow Your Online Business”.

You’ll learn exactly what pieces you need to have in place to get paid (on time) — and run a legally legit business, too.

You’re only 60 minutes away from the peace of mind that comes with having a legally sound business… Grab your seat now! 👇🏽👇🏽

Will I see you there?! Say “YES!” In the comments 👇

Ask me anything about getting paid & stopping non-payers in their tracks in the comments 👇