What do you do when a client doesn’t pay?

You go and talk to them, of course.

But how do you know if they’re telling the truth? How long do you wait on their promise to pay? What if these promises go on and on without being fulfilled?

How do you gauge how committed they are to eventually paying?

Is there anything you can do to make it easier for them to pay back?

And if they’re still not paying, at what point to you draw the line? Call it quits? Send the case to court?

And is that even worth it? What does that accomplish if the loan is smaller than lawyer fees? And what happens if the court’s only recourse is seizing the few belongings the client has, such as a refrigerator and TV? And what if that refrigerator and TV hold virtually no resale value because local stores offer large and long lines of credit for such items to just about anyone that walks in the door?

What do you do if a client’s son died, and he became so depressed he stopped everything and turned to drugs? What do you do when he says he’s back on his feet again, and will get his business going again soon? How do you know the drugs are out and the work is in? How long do you wait to see if things turn around?

What do you do if all that the client invested in was stolen? What do you do when that setback has led to him to give up on his business and rely entirely on a brother to put food on the table? What do you do when he says his brother has a boat for sale, and if only he can sell the boat, there will be more than enough money to pay back the loan? How long do you wait? What alternatives do you have?

And what do you do, if you know that this person has nothing, and if the courts so choose, he will end up in jail? What does that accomplish? The MFI doesn’t recoup any expenses, the client is in no way more able to pay back the loan, and the individual, their family, and the reputation of the MFI all suffer.

So what do you do???

The only answer I have so far: you wait. And you hope…

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