What to Do When a Client Won't Pay

An unpaid invoice is rarely a lost cause, but it does need a plan. In the UK, government research found 28% of businesses affected by late payment in 2025, with about £26 billion owed to them at any moment. In New York City, the consumer and worker protection department has taken 4,832 freelancer complaints since 2017 and recovered more than $3.5 million. Here's the path from a polite nudge to small claims court, and the laws that help along the way.

First, Rule Out a Mix-Up

Plenty of "won't pay" turns out to be "didn't get it" or "can't pay it yet". Check that the invoice reached the person who pays, not just the person who hired you; whether their accounts team needs a purchase order number; and whether there's a question about the work itself. Ask, in writing, what's holding it up. A dispute about the work is a different conversation from a missing payment, and settling it first keeps the rest of your case clean.

Escalate in Steps

1. Reminders. A friendly one around the due date, then firmer ones after it. Our reminder templates cover the wording.
2. A call. A phone call often moves what emails haven't. Follow it with an email confirming what was agreed.
3. A final notice. The amount, the invoice numbers, a date to pay by, and what you'll do if it doesn't arrive.
4. A pause. If your contract allows it, stop further work until you're paid.

Laws That May Be on Your Side

• New York. Under the city and state Freelance Isn't Free Acts, freelancers can recover double damages for late or missing payment, plus legal fees. Complain to the city's Department of Consumer and Worker Protection or the state Attorney General; you have six years to sue for payment.
• California. Since 2025, a client who hires a freelancer for $250 or more must pay within 30 days unless the contract says otherwise, and can owe up to double the unpaid amount.
• Illinois. The Freelance Worker Protection Act covers work of $500 or more; the Department of Labor takes complaints up to two years after payment was due.
• United Kingdom. When a business pays another business late, you can claim interest of 8% plus the Bank of England base rate, a fixed £40, £70 or £100 per invoice depending on its size, and reasonable recovery costs. A small business owed money by a larger one can also turn to the Small Business Commissioner.
• Australia. The Small Business and Family Enterprise Ombudsman helps with disputes, unpaid invoices included, and can refer you to low-cost mediation.

Send a Letter Before Action

Before going to court, send a formal demand: who owes what, the invoices, what you've already done to collect, the interest you're claiming, and the date after which you'll file a claim. In England and Wales, if your client is an individual or a sole trader, the Pre-Action Protocol for Debt Claims sets out what the letter must include and gives them 30 days to reply. For a business client, the courts expect a reply within a reasonable time, 14 days in a straightforward case.

Small Claims, Where You Are

United States, for a business suing:

• California: up to $6,250 for a business ($12,500 for an individual), without lawyers.
• New York City: companies can't use small claims, but can file a commercial claim up to $10,000 without a lawyer.
• Texas: justice court hears claims up to $20,000, and a corporation doesn't need a lawyer there.
• Florida: up to $8,000, not counting costs, interest and legal fees.
• Washington: up to $5,000 for a business ($10,000 for an individual).

England and Wales: claims up to £10,000 go to the small claims track, and claims under £100,000 can be filed online, with fees from £35.

Canada:

• Ontario: up to $50,000, raised from $35,000 in October 2025.
• British Columbia: up to $5,000 at the Civil Resolution Tribunal, and $5,001 to $35,000 in Provincial Court.
• Alberta: up to $100,000 in the Court of Justice.
• Quebec: up to $15,000, for businesses with no more than 10 employees, and without lawyers.

Australia:

• New South Wales: the Local Court's Small Claims Division hears claims up to $20,000.
• Victoria: the Magistrates' Court hears claims up to $100,000, and VCAT hears claims for unpaid services.
• Queensland: QCAT hears minor debt claims, unpaid invoices included, up to $25,000.

Don't Wait Too Long

Every claim has a deadline. For a written contract it's four years in California and Texas, five in Florida, six in New York, Washington and England and Wales, and ten in Illinois. In Ontario, British Columbia and Alberta it's generally two years from when you knew of the claim, and three in Quebec. In New South Wales, Victoria and Queensland it's six years.

Collecting It Yourself

In the US, the Fair Debt Collection Practices Act covers consumer debts and third-party collectors; it doesn't cover business debts, or a business collecting its own invoice. Some state laws do reach a creditor collecting from an individual, California's among them, so keep every message factual and polite. This is general information, not legal advice; for a large amount, a lawyer's letter is often enough on its own.

What BillGrid Does Today

BillGrid's reminders follow up for you on the schedule you set, up to 30 days after the due date on the Firm schedule, with a heads-up to you along the way. They stop the moment the client pays, and you can pause them on any invoice. The Outstanding tab on Invoices shows where every unpaid invoice stands, and each invoice's activity shows when your client opened it, which settles "we never got it". Partial payments are recorded against the balance. The help article on payment terms and reminders shows each setting.

Where We Think the Product Should Go Next

• Late fees and interest. BillGrid doesn't add a late fee or the UK's statutory interest for you; you'd add either as a line on the invoice.