Creditor rights include your right to be paid for the work you do. However, many small business owners do not take the necessary steps to protect that right. They are too careless, too trusting, or too busy, and end up having to hire a collection agency to recover money owed to them.

Do you have a right to be paid?

My husband would tell you that if you have to ask this question, you should not be in business. Ask yourself: If you knew at the onset of a business relationship that you were not going to be paid, would you have gone ahead? Of course not. You provide a valuable service or product, one that you were asked to provide. In theory, when someone asks you to work for them, and you do the work, it forms the an oral contract. The payment, or consideration is part of that oral contract, which are legally recognized in most states, including Maine.

Is an oral contract enough to protect me?

An oral contract is fine as long both parties agree on the terms. All too often though, one of the parties will disagree and dispute the terms. You may believe in your heart that your customer agreed to pay your hourly rate, but your customer might “forget’ that conversation. If you do not have a written contract, your case is difficult to prove. Get it in writing!

I just received a new collection file where a tenant ordered and authorized work on a building. When the bill came, they refused to pay, claiming that the landlord was responsible. Luckily my client has a signed estimate with agreement to pay from the tenant. My client protected his right to be paid.

An attorney I once knew used to say that rights are like a bundle of sticks. You have many rights and you have to pick them up, bundle them together and use them as a shield, or sword, as the case may be.

Creditor rights are important, and protecting them is most important of all.