Getting paid · Contractors

Contractor not getting paid: how to collect what you're owed

Updated June 2026 · 5-minute read

Not getting paid is the most expensive problem in the trades — one stiffed job can wipe out a week's profit. The good news: you have more leverage than you think. From fastest and cheapest to slowest: a firm final invoice, a written demand, a mechanic's lien, then small claims court, with collections as a last resort. Here's when to use each.

Collection methods, ranked by speed and cost

1 Restate the debt in writing

Re-send the invoice with a firm deadline and a short summary of the completed work. Sounds basic, but a clear, dated 'this is past due, pay by X' document is the foundation every later step builds on — and it nudges the honest-but-slow payers without any conflict.

2 The demand letter — your cheapest leverage

A formal written demand (amount, work done, final deadline, and notice of lien/legal action) costs you nothing but ten minutes and gets a large share of unpaid invoices paid. It signals you're organized and serious, which is exactly what avoidant customers are betting you're not.

3 Mechanic's lien — the trades' superpower

If you improved real property, a mechanic's lien clouds the title until you're paid — the owner usually can't sell or refinance around it. It's the single strongest tool a contractor has, but it's deadline-driven and state-specific, so act early and follow your state's notice rules.

4 Small claims court

When there's no property to lien — or you just want a judgment — small claims is cheap, fast, and built for self-representation. Dollar limits vary by state (often $5,000–$15,000). You bring your contract, invoices, and photos; no lawyer required.

5 Collections agency (last resort)

If you've exhausted the above, a collections agency or selling the debt recovers something on truly dead invoices — but they take a significant cut (often 25–50%), and it won't help future jobs. Treat it as salvage, and focus your energy on never landing here again.

The real fix: never chase payment again

Did the work. Got stiffed. — stop it before it starts.

Everything above is you chasing money you already earned. PaidUp flips it: you authorize the customer's card before day one, so the funds are locked in and captured the moment the job's done — no invoice to chase, no lien to file, no court. We're building it now for US tradespeople.

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FAQ

What's the single most effective step?

For most contractors it's the formal demand letter — it's free, fast, and resolves a large share of unpaid invoices because it shows you're organized and will escalate. The lien threat behind it is what gives it teeth.

Is it worth chasing a small unpaid invoice?

Often yes, because letting it slide signals that you can be stiffed. A demand letter and (if eligible) a lien cost little. For very small amounts, weigh your time — but never let 'too small to bother' become your reputation among customers.

Do I need a lawyer to collect?

Usually no for the early steps and small claims, which are designed for self-representation. A lawyer helps for larger liens, lien foreclosure, or commercial disputes. Most stiffed residential jobs never need one if you escalate properly.

This is general information for tradespeople, not legal advice. Lien deadlines, small-claims limits, and collection rules vary by state — check your state's rules or talk to a local attorney before acting.