When a customer fails to pay for goods or services, your business faces financial disruption. You need that revenue to maintain operations and cash flow. Under Rhode Island law, you have legal tools to pursue the debt.
Understand your legal right to sue
Rhode Island courts allow businesses to initiate lawsuits for unpaid debts. The court you choose depends on the claim’s value. If the amount owed is under $5,000, you can file in Small Claims Court, which offers a streamlined process. For larger claims, use District or Superior Court. To support your case, present documentation such as contracts, invoices, or written communication confirming the agreement.
Try collection methods first
Consider resolving the issue before filing a lawsuit. A demand letter can outline the amount due, set a firm deadline, and indicate your intent to escalate. If that fails, using a collection agency may prompt payment. The involvement of a third party or the threat of legal consequences often motivates customers to settle.
What happens if you sue
Filing a claim requires formal service of a court summons to the customer. The legal process gives them time to respond. If they default or the court rules in your favor, the judgment permits enforcement through wage garnishment, bank account levies, or property liens. Rhode Island statutes define what you can collect and how to proceed with enforcement, so follow court guidance closely.
Stay within the statute of limitations
You must act within the legal time limits to enforce a debt. Rhode Island allows 10 years to sue over a written contract and 6 years for an oral agreement. If you delay beyond those periods, the court will likely bar your claim. Prompt legal action preserves your rights.
Keep your contracts clear
Well-drafted contracts help you prevent and resolve payment issues. Include exact payment terms, interest rates for late balances, and consequences for default. When a dispute arises, thorough documentation strengthens your legal position and improves your chances of successful recovery.
