[TX] We are a small HVAC company located in Texas. We have a lot of past due unpaid debt. We have reached out and resent the invoices multiple times but we have about collectively $200,000 in debt between dozens of customers going back to 2023. What would be the first course of legal action to take?

Lexi, Chatbot

I’m sorry to hear about the challenges you’re facing with unpaid debt. Have you sent any formal demand letters to these customers regarding the overdue payments?

Lexi, Chatbot

Have you kept detailed records of the invoices, communications with the customers, and any agreements or contracts related to the outstanding debts?

Lexi, Chatbot

Is there anything else the Lawyer should know before I connect you? Rest assured they’ll be able to help with your debt collection.

TJ, Esq.

Hello! My name is TJ and I’m an attorney. Thanks so much for the opportunity to assist you! I reviewed what you wrote and I’m about to post my initial answer.

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TJ, Esq.

It sounds like you’re taking the right steps by sending formal demand letters to customers regarding the overdue payments. The next legal step would likely be to file a claim in small claims court for individual debts if the amounts are within the small claims limit, or potentially pursue civil litigation if the amounts exceed those limits. (which in Texas is $20,000 per Sec. 27.031)

For the customer who sold their business and is no longer reachable, you might want to check if they have a legal obligation to settle the debt through the sale, or if there are any guarantors or personal assets you could pursue. It might be time to look at enforcement options like a lien or wage garnishment if judgment is obtained.

TJ, Esq.

If you decide to file a lawsuit, it’s important to have all of your invoices, communications, and any records of attempts to collect on the debt ready for presentation in court. The more documentation you have, the better your chances of success.