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Business debt collection can lead to litigation

When a Maryland company enters into a contract to provide goods or services to another business, it expects to be paid for its efforts in accordance with the contract. Things do not always go as planned, however, and it might become necessary to actively pursue payment from the other party. When business debt collection does not occur after reasonable efforts are made to resolve the matter amicably, it might be necessary to file litigation.

A company now known as TheraStat Data LLC provided computer hardware, software and training to Maples Health Care Inc. in a contract executed between the parties in May 2012. In exchange, Maples was to pay TheraStat $1,129 per month. Everything appeared to be going according to plan until Aug. 2013.

From then until Aug. 2015, payments from Maples became erratic. The West Virginia-based health care company failed to make full payments each month as agreed to in the contract between the parties. In a recently filed lawsuit, TheraStat alleges that by the time it stopped providing its services to Maples in the Fall of 2015, it was owed approximately $19,229. The lawsuit also alleges that Maples ignored TheraStat's efforts to collect the outstanding amount.

Most Maryland companies will pay their debts in adherence to a contract without hesitation so long as they are receiving the goods and services promised by the other party. However, there are occasions when payments are not made and business debt collection efforts must begin. In these situations, it would be beneficial to understand each party's rights and responsibilities to the other under the contract. Once any reasonable efforts at resolving the dispute fail, filing litigation might be the next step.

Source: wvrecord.com, "Tech firm sues Maples Health in breach of contract dispute", Robert Hadley, March 4, 2016

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