As we have seen in some of our “Did you know …” articles the prevention and management of invoices is a good way to avoid having overdue accounts. However, if despite your best efforts to prevent this, a customer refuses or neglects to pay his invoices, there are some times where it is necessary to take a more active approach. Mainly, two options are available to you regarding account collection, the collection agency and a lawyer specialized in debt collection. Both services offer distinct advantages depending on the situation.

The collection agency is more useful when the amount of your accounts receivable is smaller. The agency operates mainly by sending frequent letters and calling often. Their goal is that their insistence will bring the debtor to pay the invoice without going through the court system. They are particularly effective when the debtor is an individual. The powers of these agencies are however limited by the law1, and they cannot do much outside of these limits. They will possibly reach their goal when the debtor is being negligent or simply wants to stretch the delay. However, if the debtor refuses to pay completely or if the debtor refuses any contact, it’s time to consult a lawyer.

The lawyer, by his ability to make representations in court, will generally have a stronger impact than the collection agency. Without sending as many letters and calling as often as the agency, the steps taken by the attorney will generally compel a greater reaction from the debtor. The idea that the situation may lead to a court case will usually help the debtor be more inclined to pay the amounts stated in your accounts receivable. Also, when your debtor refuses to pay for various reasons, including poor quality of work performed, only a lawyer can file procedures to the courts to obtain judgment against the debtor. While the judicial process can be long and lead to fees, it remains the only way to force the payment of your accounts receivable.


1An Act respecting the Collection of Certain Debts  (R.S.Q., c. R-2.2)