If customers don’t pay their bill, what can you do?

If you run business in Japan, and were not able to receive payment from a customer, how can you deal with the situation?

There are two steps for demanding payment. The first step is demanding voluntary payment. The second step is demanding payment by legal procedures.

1) Demanding voluntary payment

To demand voluntary payment, generally the contents-certified mail is used (“Naiyo-Shomei Yuubin” in Japanese). On the mail, you should set a deadline and tell the debtor that you will go to legal procedures if the debtor did not pay by this deadline.

You can hire an attorney to write this mail for you, so that you can make the debtor understand that the legal procedures will surely be taken when there is no payment.

2) Demanding payment by legal procedures

If you could not receive the payment from the debtor voluntarily, then you can go to legal procedures (or you can go to legal procedures from the beginning, if you think that the debtor will not pay voluntarily from the first place).

The major legal procedures are as follows;

i) Demand for Payment (“Shiharai-Tokusoku”)
ii) Civil Conciliation (“Minji-Chotei”)
iii) Action on Small Claim (“Shogaku-Soshou”)
iv) Civil Suit (“Minji-Soshou”)

(To be continued)

Published by

Kei Sumikawa

Attorney at Law (Sumikawa Law Office), Kawasaki city, Japan