If you haven't, find out why they are not paying and try and work it out, saying something more than "pay me" can be surprisingly effective, do this through email/mail so you have a written record. If that fails, have a lawyer send them a letter. If that fails than small claims court. The first two steps will put you in a better position for small claims court and make it less likely it ends up being your word against theirs, get that documentation.
Yes, this is what small claims court is for. Business entities can bring disputes up of up to $5000, private individuals (including you if you did work-for-hire with a 1099 or the like) up to $10,000 - but you give up the right to sue in regular court.
There's a small filing fee, you have to get the notice of the proceeding to your problem customer (eg by registered mail), then you both have to turn up at a certain date. If you and the customer are far apart geographically there may be a way to conduct the proceedings via Zoom or the like - if not ask your state bar for advice.
On the day both parties appear, you can't have legal representation (though you can bring a friend, partner, or a witness). You'll be invited to try mediation first, usually sitting down at a table with a pro mediator that tries to straighten out miscommunications or hurt feelings.
If that doesn't work out, the case goes ahead. You both explain the facts as you see them to the judge, along with any supporting documentation. The judge will ask questions, make a determination, and maybe award damages or impose some sort of compromise depending on circumstances. SCC judges hear a lot of bullshit and don't tolerate side arguments or amateur lawyer theatrics. They like people who are organized, stay on point, and don't get emotional, shift the goalposts of their argument, or make personal attacks.
You will probably find it emotionally stressful even though it's informal, because the anxiety and frustration of the dispute will all resurface at once, you have to relive the whole dispute but with a complete stranger sitting in between both of you, and the complete stranger's decision is final. But win or lose, if you are honest and give it your best shot you will probably find it a good and educational experience.
You might not need to go to small claims court. A letter may be sufficient: briefly summarize the issue, explain that you need to move on, and indicate that you are ready to send either the debt to a collections agency, file a lien on the customer's business/property, or file at SCC. Be firm, but also be polite and word things in a way that leaves the other party's dignity intact.
https://www.amazon.com/Business-Law-Barrons-Review/dp/143800... is a great book that summarizes the legal principles, infrastructure, and common situations that arise in commerce. It's not a DIY guide but will help you to think and communicate clearly about your problem situation. Best of luck.
Thank you for this! I’ve fortunately never been in that spot but knowing how that plays out helps reduce my concern about new deals outside my social group
Legal action costs you money. If you win, you get a "judgement". To attempt to collect on that judgement costs you money. There are many ways to avoid paying a judgement. You need to decide if you can collect from the customer before you start down this path.
