What You Should Do if a Client Withholds Payment

While working as a freelancer or having your own online business does have its benefits, it’s important to note that they also come with pretty significant drawbacks. One of the most notable downsides to working as a freelancer and having an online business comes in the form of payment issues. Indeed, it can be rather difficult to deal with clients that are either delaying your payment or withholding it completely.

Given how tricky situations like this are, we thought it would be useful to put together a short article discussing the best course of action for these situations. If this is something that you’re interested in knowing more about, read on as we break down what you should do if a client is withholding your payment.

Contact Your Client

Before you do anything else, we advise you to reach out to your client and ask them why they are withholding your payment. While this may seem trivial, taking the time to contact them before taking any other actions can save you a lot of time and resources. If the issue can be resolved without the need for any legal action, then it’s best that you explore all the alternatives. If you do come to an agreement regarding your payment, it would be best to get everything on record. This is because you may need to rely on your record if you are unable to resolve the dispute.

Go Through Your Contract Carefully

If things can’t be resolved, then it’s time to go through your agreement. You’ll want to look for sections that discuss payment, debt recovery, and dispute resolution. This will inform how you’ll go about doing things when it comes to receiving payment from your client. If you have no written contract, a verbal agreement or part written will work as well. All you need to do is to collate all emails/text messages/social media messages that you and your client have exchanged about your goods or services and their price. 

Write a Formal Letter of Demand

For clients that still refuse to release payment, it would be wise to write a formal letter of demand. For those of you that have never written a letter of demand before, here’s a quick summary of everything it should include:

  • Date.
  • Ensure the words “Letter of Demand” are at the top of the page.
  • The amount the client owes you.
  • The service that you provided.
  • The date when the client needs to pay.
  • A warning about what will occur if payment is not released.
  • Your signature.
  • Any and all relevant documentation.

Hire a Lawyer and Lodge a Small Claim

If your client still refuses to release your payment after you send them a formal letter of demand, then you have to start considering taking legal action. It would be best to speak with a lawyer so they can advise you on the best course of action to take.


We hope this article proves to be useful when it comes to helping you resolve any payment issues you may be having with your clients. Be sure to keep all of this information in mind when addressing any and all payment issues so that you can make the best possible decisions for your specific situation.

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