7 Steps to Take if Someone Doesn’t Pay You for Your Services

At some point, most freelancers or business owners face the question of what to do if someone doesn't pay for a service. Statistics are astonishing — 71% of freelancers have experienced difficulties in receiving payment, resulting in almost $7.5 million in debt, according to the Freelancers Union. 

Non-payment is not simply unpleasant; it can cause serious harm to your finances. In Europe, around 25% of businesses go bankrupt due to late or missing payments. Let's explore the steps you can take to prevent such incidents from happening and learn how to handle the situation when a client refuses to pay.

Take preventive measures

Freelancing isn’t risk-free, and it's always better to prevent a payment problem than to have to deal with it later. Here are three simple ways:

1. Use contracts

According to Bonsai, 29% of invoices are paid late. Of these, more than 90% are paid within a month of the due date.

If you don’t want to fall into these 29%, it's important to set clear expectations for yourself and your client from the beginning. A solid contract forms the basis for your safety and the expectations of your clients. It should include:

• The service you offer and the scope of work to be done
• Payment terms and deadlines
• Fees in case of late payment 

Late fees can actually save time and ensure payment is due on time. Note that the fees may vary depending on the state's laws. For example, in the UK, you can charge up to 8% late fees, and in the US, most states do not have a maximum late fee.

I believe a late fee policy can be effective, but in reality, it depends on the client's attitude and professionalism. The ones who don’t intend to pay won’t care about penalties. That said, having a policy written in the agreement at least gives you legal leverage. I haven’t personally used early payment discounts, but for long-term collaborations, I would consider offering a small incentive.

{{Petar Sotirovski}}

2. Request upfront or milestone payments

The best way to ensure that you are not left with an unpaid invoice is to ask a client to pay you upfront. You can receive payment in three ways: a small deposit, full upfront compensation, or milestones. A deposit is usually non-refundable and is taken to show the client's commitment and start the work without the risk of last-minute cancellation. Milestones are useful for larger projects, broken down into stages. And full upfront compensation is crucial with clients who may delay payments. To learn more, please read our comprehensive guide to Upfront payments. 

3. Check clients before working with them

It might seem obvious, but it can be helpful to do some research on a company before getting too excited about working with them on a new project. Marketplaces like Upwork have a client section where you can see what other freelancers have said about working with them. You can also check their social media presence or simply Google reviews to get an idea of their reputation. If a client responds slowly and refuses to sign a contract or agreement, it may be a sign that they are not a reliable partner. In this case, it's best to politely decline their offer at the very beginning. 

I’ve experienced both late and non-payment several times. In one case, I worked for a Swiss pre-build company. I was told I’d be paid monthly, but after the first month, the owner claimed the company had no liquidity. I followed up for over four months — each time he said he’d pay. Eventually, I had to leave negative reviews on every platform I could (Google, Facebook, etc.), and only then did he pay 50% of what was owed. I’m still waiting for the rest. Because of experiences like these, I now always ask for part of the payment upfront and make sure there is a very clear agreement in place before I start. Even then, it's not a guarantee — but it’s a basic layer of protection. 

{{Petar Sotirovski}}

Now that you've done everything in your power to avoid this, let's discuss the steps you can take if your invoice is unpaid.

Step 1: Send a friendly reminder

Some clients may simply be busy or overlook your invoice. So, the first thing to do if the client doesn’t pay is to send them a friendly but firm reminder. To resolve the issue quicker, provide all relevant invoice details, including the invoice number, payment amount, due date, and a link to the payment method (if applicable). You can also attach a link to the original invoice or a PDF file to ensure that the client has no excuse for not finding it. 

It's best to send this reminder immediately after the delay, either at the end of the due date or the following day. You can use professional invoicing tools like QuickBooks or Clockify to send them on schedule. 

Be polite but firm. A typical message I use is:

Subject: Follow-up on Payment – Invoice #[XXXX]
Hi [Client's Name],
I hope you’re well. I’m following up regarding the pending payment for
[project]. As per our agreement, it was due on [date]. Please let me know if there’s an update or issue from your side.
Looking forward to your response,
[Your Name]

If there’s still no response after a few emails, I consider calling or posting a public review if the situation is clearly unfair.

{{Petar Sotirovski}}

Step 2: Make a personal contact 

If a reminder is ignored after the first attempt, it's best to try another strategy and reach out again by making a phone call or scheduling a meeting with the client. A study from the University of Texas revealed that phone calls are more effective in problem-solving because they create a stronger personal bond. It's much quicker to call than message, and it's also more difficult to ignore the issue when having a live conversation. Don’t forget to write a follow-up email after the call and list everything you agreed upon.

Step 3: Send a debt collection letter

If your reminders and calls don’t do the trick, the next step is to send a debt collection letter. It's more formal than a friendly reminder and demonstrates your seriousness about receiving your payment. A debt collection letter should include all the information from a friendly reminder and clearly state the actions that you are willing to take if payment is not received by a certain date.

Sending a debt collection letter is not just about demanding what you deserve but also about documenting your efforts to resolve an issue without having to go to small claims court. So, it is best to send debt collection letters via certified mail with a return receipt. This way, you can prove that they were successfully delivered.

Step 4: Send a final demand letter 

A demand letter is similar to a debt collection one and is the final step before taking legal action. It should clearly state your readiness to do so and mention all the previous attempts to resolve the issue amicably. You can mention contacting your attorney or actually hire one to write the letter for you. Although it adds weight if written and sent by a legal representative, it comes at a cost. The average price for a legal demand letter written and delivered by an attorney in the United States ranges from $750 to $1,200.

Step 5: Take legal action 

When all else fails, you may have no choice but to take legal action against your client in order to recover the money owed. If the amount is under a certain threshold — between $2,500 and $25,000 in the US (depending on the state)  and £10,000 in the UK — your go-to instance is a Small Claims Court. It's the simplest option. You typically don't even need a lawyer filing a lawsuit, and if your client doesn't appear in court to defend themselves, you will win by default. However, the legal process isn’t quick. According to The Law Society, small claims might take over a year to reach trial. 

If the amount of money you are seeking to collect from your client exceeds the small claims court's jurisdiction, you will need to file a lawsuit in a civil court. In the UK, your case can either be processed through the Fast Track system (if the amount involved is under £25,000) or the Multi-Track system (if it is over £25,000). These cases are more complex, so it is preferable to seek legal advice or hire a lawyer, although it is not mandatory. You can still file a complaint yourself. 

Winning a case does not necessarily mean that you will receive payment immediately. Your client may still refuse to pay. In that case, a court can enforce the judgment by garnishing wages (deducting money directly from their income), putting a lien on property (preventing the sale until the debt is paid), or seizing their business and personal assets to collect the money. 

If more than 3–4 reminders go unanswered and the client is clearly avoiding payment, I consider going public or contacting a legal advisor. In my case, public reviews helped. Legal action is often too expensive for freelancers, but if the amount is high enough, it might be worth it.

{{Petar Sotirovski}}

Step 6: Hire a debt collection agency

If nothing else works and you're still determined to collect your money, the last resort would be to hire a debt collection agency. It may seem like a drastic measure, as these agencies will pursue payment for your case quite aggressively. However, it might be an effective solution. The success rate for debt collection agencies in the US is around 20-25%, so it’s worth trying, especially when you have nothing to lose and everything to gain. Well, not everything; not really. An agency will charge around 20%-40% of the total recovered debt. But the good news is that most of them operate on a "no success, no fee" basis, so if they're not able to provide you with the help you need, you won't have to pay anything. 

Before hiring an agency, make sure: 

1. you have all relevant documents in order (invoices, email correspondence, legal documents), as you are basically transferring your debt to them;
2. you choose a respectable and licensed agency that complies with laws;
3. the amount of your debt is worth the commission fee in case of winning. 

Step 7: Let it go 

Statistics show that the longer an invoice is outstanding, the less likely it is to ever be paid. In fact, only 18% of invoices are paid after 90 days have passed since their due date. If it's your case, and the amount involved is relatively small, you might want to consider letting it go and taking preventative measures next time you work with a client. 
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When someone doesn’t pay for your services, it’s important to react with a cool head and structured approach. Every step you take — from handling the situation diplomatically to exploring legal options — increases your chances of getting paid eventually. Stay professional, document everything along the way, be prepared to escalate the situation when needed, and always remember to set clear expectations from the start. It’s your best defense against future payment problems.