Getting Paid: The Escalation Ladder

What to send and in what order when an invoice goes unpaid, which lien waiver is safe to sign, and the paperwork that stops problems before they start.

The ladder

Day after due date	Friendly first reminder, assume it is admin
7 to 14 days later	Firm second notice with a dated deadline
No response	Final demand, stating the step you will actually take
Then	Mechanics lien or small claims, whichever fits the debt

Lien waivers, safest to most dangerous

1. Conditional on progress payment	Safest
2. Conditional on final payment
3. Unconditional on progress payment
4. Unconditional on final payment	Most dangerous
The rule	Conditional before the money. Unconditional only after it clears

Before you pay a sub

Get a W-9	Before the first payment, never in January
No valid taxpayer ID	You must withhold 24% and report it on Form 945
1099-NEC threshold	$2,000 in 2026, raised from $600
1099-NEC deadline	To the sub and the IRS by January 31

Signed at the customer's home?

FTC Cooling-Off Rule	Applies to contracts of $25 or more signed at the customer's home
They can cancel	Within three business days, until midnight of the third business day
Temporary sales locations	Threshold is $130 or more
State law	Many states add their own right to cancel, sometimes longer

Lien deadlines and preliminary notice requirements are set by each state, they are short, and several states require a notice early in the job or you never get lien rights at all. Check your own state clock before you rely on a lien.

Sources: irs.gov · ftc.gov

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