How to Collect Money Owed to You

Does someone owe you money? There are actually many different strategies available to you that could help get the money you are owed.

It can be frustrating when you are owed money that isn’t being paid to you. You want to learn how to collect the money you are owed, without crossing the line.

These are some of the strategies that you can try.

Start With a Clear Perspective

Before going any further with these debt collection strategies, you need to look at this from a clear and unbiased perspective.

Have you given the debtor enough time and notice to repay the debt?

Just because you need money right away isn’t necessarily a good reason to demand immediate payment.

You could ruin a personal or business relationship with someone due to you being too hasty and unreasonable with collecting outstanding bills.

Before continuing with any of the other strategies, make sure you’ve given them enough time to make the payment.

Contact the Debtor

The first thing you should do if someone owes you money is to contact them directly. There could be legitimate reasons that you have not yet been paid. It is crucial that you attempt to contact the debtor directly before starting any legal procedures. If you can’t meet in person, pick up the phone and make a call. This will be far more effective than sending a letter.

Maintain a friendly and calm attitude. Getting into an argument and having the debtor be angry at you will likely just make it more difficult to collect the money they owe you.

When you are talking with them, don’t let them negotiate a price. If they offer to make a partial payment, make it clear when you expect the entire remaining balance.

Send a Formal Letter

If you still have not been able to collect the debts after multiple requests and the due date has passed, it is time to send a very serious and formal letter.

Here are the guidelines to follow for writing and sending your letter:

  • Include names and addresses of all people involved
  • Include copies of contracts and other paperwork relating to the debt
  • Give a final date for when the payment must be made by
  • Offer the chance for the debtor to put in writing any disputes they have
  • Tell them that you will escalate the matter if the debt isn’t paid
  • Send the letter via registered mail and photocopy all documents
  • Do not be abusive or make threats – It is important to stay within the law


Review all of your records to determine if you have any kind of a contract with the person who owes you money. An official contract is the best case scenario.

If you don’t have that, you should look for emails, text messages, letters, etc., acknowledging that they owe you money. If you don’t have any documentation regarding the debt, there you don’t have many options available to you.

All you can do is turn your situation into a lesson. the next time you enter into an agreement where someone owes you money, make sure to get it in writing.

Small Claims Court

If you have completed all of the steps outlined above, you have the necessary proof to show that this money is owed to you, it’s time to escalate the issue.

Your next step is to consider taking the matter to small claims court.

Filing a claim in small claims court is actually much easier than people realize.

  • You do NOT need an attorney to file in small claims court
  • Contact the local court to request the paperwork needed to file a claim
  • Find the court through a Google search
  • Search for “small claims court” along with your state
  • The filing fee is usually less than $50
  • Each state sets its own maximum claim amount, it’s usually under $7,500
  • Once filing the paperwork, ensure the debtor is served
  • Wait for the court to set a date

One thing to note is that even if you take your case to small claims court and win, you will still be responsible for collecting money that you’re owed.  If the person still refuses to pay, you may still have to hire a collection agency.  (see below)


Another debt collection strategy is to use mediators instead of going to small claims court. A mediator is a professional, hired in order to settle a dispute outside of court.

A mediator may make it easier for an agreement to be reached, however, this must be reached voluntarily between the two parties, so is not a guarantee for success.

Find a mediator through a Google search. Type in “mediators” along with your city, for a list of mediators in your area.

Debt Collection Agencies

These are third party companies that you can pay in order to pursue money owed to you. Some debt collectors will charge up to 50%, and will only take your case if it offers a good chance of success.

You can find debt collection agencies through a Google search.

What Do You Think?

Do you have other methods that have been successful for you when trying to collect money that other people owe you?

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