Goodman’s 7 Guidelines to Increase Your Chances of Getting Paid

By: Howard Goodman, Attorney at Law, Howard Goodman & Associates

7590399A creditor improves his chances of collecting on the claim if he follows certain routine procedures. A debtor is less inclined to assert a bogus defense and more inclined to pay the claim if the debtor knows the creditor’s claim can be proved with certainty. A Judge or jury is more inclined to award a judgment to a creditor who dots his “i’s” and crosses his “t’s” before and after the transaction.

Here are some recommended guidelines to ensure you are paid by your customers and to help prevent delinquent debt in the first place:

  1. Attempt to obtain a purchase order or get a written contract signed by the debtor prior to furnishing goods or services. If this is too burdensome, confirm the agreement by letter.
  2. If you are extending credit, get a written credit application from the debtor with as much information as possible so that you can find the debtor, locate assets and collect on a judgment. Be certain to include a clause allowing for recovery of interest at 18% per annum on delinquent sums, court costs and reasonable attorney’s fee.
  3. If the debtor is a corporation, attempt to get a personal guaranty signed by one or more principals. The personal guaranty can be a single sentence at the bottom of the credit agreement.
  4. If you are delivering goods, get proof of delivery. If delivery is by a common carrier or by your own truck, get a signature from the driver confirming delivery. It is even better to get a signature from the debtor confirming receipt.
  5. Attempt to get the debtor to also confirm in writing that the goods or services are satisfactory and accepted.
  6. If the debtor objects to the goods or services, send a confirming letter to indicate your willingness to remedy any defects. Above all, the Court is looking for good faith and reasonable behavior by the parties.
  7. If there are extended conversations concerning a dispute, confirm the substance of such conversations by letter. Maintain a paper trail. At trial, the debtor is bound to exaggerate and possibly lie concerning the dispute. His testimony will likely be rejected if he has failed to document the dispute in writing. Given conflicting testimony, the Court will probably decide in favor of the party who has created a paper trail and has demonstrated good faith and reasonable behavior.

About Howard Goodman, Attorney at Law

Goodman is an attorney with over 37 years of experience practicing law in Southern California. He is a member of ALQ and can be contacted by email at

Howard Goodman graduated from UCLA cum laude with a bachelor’s degree in political science in 1974. He was admitted to the State Bar of California on December 21, 1977, State Bar #76570. He worked as an associate attorney with Black & Warden from 1977 to 1980 working primarily with litigation in the collection of commercial accounts and subrogation and gaining critical experience.

He started his own practice in 1980 and acquired further experience with construction industry disputes representing sureties, material suppliers, vendors, subcontractors and general contractors in litigation and arbitration.