Unpaid invoices can hurt cash flow and disrupt business operations. When a commercial client or trade partner does not pay, a creditor may consider filing a collection lawsuit. Before doing that, it helps to confirm the debt is well documented, the claim is still timely and any likely defenses have been addressed.
Do you have proof of the debt?
A creditor should keep records that show the debt exists and remains unpaid. Helpful documents may include signed contracts, invoices, payment records, account statements and written messages that acknowledge the balance.
If someone assigned or transferred the debt, the creditor may also need proof of the right to collect it. Missing records can make it harder to prove how much is owed or even who can file the claim.
Has the deadline passed?
Florida law sets deadlines for different civil claims. Under Florida law, claims based on a written instrument generally have a five-year deadline, while claims not based on a written instrument generally have a four-year deadline.
The deadline may begin when the claim accrues, which depends on the contract terms and the facts of the default. Creditors should confirm the correct start date before filing.
Are there likely defenses?
A debtor may dispute the amount owed or argue that the goods or services were defective, the contract was breached or part of the balance was already paid.
Before filing, creditors should gather records that address these issues. Contracts, invoices, delivery records, payment histories and correspondence can help show what the parties agreed to and what remains unpaid.
Creditors should also consider whether the debtor has assets that could make a judgment collectible. A court judgment does not always lead to payment.
A final check before filing
A collection lawsuit can be a useful option, but it also takes time and money. Reviewing the contract, payment history, evidence and possible defenses can help a creditor decide whether litigation makes sense.
An attorney familiar with Florida commercial collections can help review the claim and explain the available options before filing.