The Ultimate Guide: Dealing with Clients Who Refuse Payment After Service

Many people gladly accept the services provided in our world. However, what should you do when it’s time to pay up, but the client refuses payment? Of course, they’ll have an explanation, but the fact remains that you’re not getting paid. Strangely enough, these people will use the money to buy something else.

Many people noticed the mechanic’s anger over unpaid work. The mechanic’s actions, captured in a viral video, involved dismantling car parts. The video garnered attention across various social media platforms.

Why Did the Client Refuse Payment to the Mechanic?

The client asked the mechanic to repaint the car. After completion, the client unexpectedly refused payment. Given that this was not depicted in the video, the cause of the change of heart is unknown. 

The mechanic grew angry due to the client’s refusal to pay. He then removed the car’s paintings in frustration. The question now is, is it legal for the mechanic to remove the paintings from the car?

Ugo Lord, the renowned attorney, states that if a client refuses last-minute payment, mechanics can reclaim installed parts. They retain this right until receiving full payment for their services. 

But the thing is that the mechanic will have to return the vehicle to its original condition, and if they cannot do so, they cannot remove whatever part they installed. And since it was a paint job, there are like a thousand layers of paint in the vehicle which makes it impossible for the mechanic to return the car to its original state. 

Therefore, the only legal option is to file a Mechanic’s Lein and some jurisdictions will allow the mechanic to keep the vehicle until the bill is paid. However, since the mechanic removed the paint, he can be held liable for all the damages.

What Are the Things to Do if a Client Refuses Payment?

Working with a client who doesn’t want to pay their bills can give any business owner a horrible sentiment. As a company owner, you are aware of what happens when multiple clients simultaneously neglect bills, begin offering justifications or cease communicating. 

You will be unable to pay staff, vendors, suppliers, and investors as well as disruptions to cash flow. Below are some of the things you can do if a client refuses payment.

1. Establish definite objectives right away: From the moment you meet your client, you should set the groundwork for payment before accepting the job. So before you start the work, let the client know your charging rate, billing policies, and payment deadlines. Put your conditions in writing by creating a formal service agreement.

2. Convey a memorandum quickly if payment isn’t received by the deadline: Send the bill again along with a note stating that payment has not been received.  You can use a notation like “Did you forget? It’s time for you to make your payment.” 

Giving your client more time is not required, but if you’re working with a big company that needs more time to process payments, establish a deadline of one or two weeks in advance when the client refuses payment. 

3. Write a Letter for Debt Collection: Compared to a reminder, a debt collection letter is more professional. It consists of:

• The due date for making the payment

• A payment period (usually two weeks) 

• A list of acceptable payment methods

• A declaration of what will happen if you don’t get paid. In your declaration, you can use a preliminary statement like “to avoid further action” or a more assertive declaration (like “I’ll turn the problem over to a collection agency or commence legal action) 

4. Establish a Personal Phone Call or in-person Meeting with the Client:

Try calling or setting up a meeting with the client to discuss the problem and work out a resolution if you don’t hear back after sending them reminders and letters when client refuses payment. 

Conclusion

If this ever happens to you, hire a lawyer and send a final demand letter. If this doesn’t work out file a lawsuit. 

You can either file the lawsuit with small claims court or a civil lawsuit if the money your client owes you is more than the small claims court limit. However, if you don’t want to file a lawsuit, you can contact collection agencies to get the debt for you.