I'm owed $393; client won't pay; what are my options?

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fredflinstone
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I'm owed $393; client won't pay; what are my options?

Post by fredflinstone » Wed Feb 12, 2020 6:29 am

My wife Wilma performed a service for a client. Everything went fine as far as I know. Upon completion of the job, I sent an invoice for the amount owed -- $393 -- and have received no response. The client signed a contract before Wilma performed the job. She even offered to pay me the fee prior to completion of the job. I said "It is fine to pay us after the job is done." I always say this because Wilma incurs reimbursable expenses during the course of the job. It's simpler to invoice once after the job has been completed.

The contract states that if there is a legal dispute, the loser will pay for the winner's reasonable legal expenses. I have not yet pointed out the loser pays provision to the client. Perhaps I should do so. That said, if I pay thousands of dollars to a lawyer it seems to me that there is no guarantee that I will be able to actually get that money back even if a Court orders the client to reimburse me for those costs.

I heard that the client has had some serious health problems recently. I have tried to be patient. I sent several polite emails requesting payment. No reply. It has been more than a month and I am concerned. I have never dealt with a problem like this. I don't think small claims court is an option, because the client lives out of state. It's "only" $393 but I am loathe to just write it off.

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snackdog
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Re: I'm owed $393; client won't pay; what are my options?

Post by snackdog » Wed Feb 12, 2020 6:33 am

I can't give legal advise here but have you tried a phone call? It might be helpful to find out if the client "won't pay" or "can't pay", since those two are different.

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galawdawg
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Re: I'm owed $393; client won't pay; what are my options?

Post by galawdawg » Wed Feb 12, 2020 6:38 am

Have you tried calling the client? Is this someone you (or your wife) has done work for in the past?

You are correct that attempting to collect that amount from an out-of-state customer would cost much more than the amount you are owed. So perhaps a courteous phone call just to check on the client and the status of the overdue payment would be helpful. If the client has indeed had serious health issues, a kind call to see how they are doing and gently inquire about payment may go a long way towards getting some or all of the amount collected.

Absent voluntary payment by the client, for that amount of money it is probably best to just write it off. You'll spend multiples of that trying to collect.

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Re: I'm owed $393; client won't pay; what are my options?

Post by yangtui » Wed Feb 12, 2020 6:58 am

Can you sell the receivable?

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JoeRetire
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Re: I'm owed $393; client won't pay; what are my options?

Post by JoeRetire » Wed Feb 12, 2020 6:58 am

fredflinstone wrote:
Wed Feb 12, 2020 6:29 am
I don't think small claims court is an option, because the client lives out of state.
That's the client's problem, not yours.

Send another invoice with an indication that it's overdue. If you still have no response after another 30 days, file in small claims court.
If you win a judgement, the client will pay the court costs.
Very Stable Genius

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galawdawg
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Re: I'm owed $393; client won't pay; what are my options?

Post by galawdawg » Wed Feb 12, 2020 8:00 am

JoeRetire wrote:
Wed Feb 12, 2020 6:58 am
fredflinstone wrote:
Wed Feb 12, 2020 6:29 am
I don't think small claims court is an option, because the client lives out of state.
That's the client's problem, not yours.

Send another invoice with an indication that it's overdue. If you still have no response after another 30 days, file in small claims court.
If you win a judgement, the client will pay the court costs.
Respectfully, that is not likely to result in any enforceable action and would in all probability just result in additional expense for OP. In most cases, civil litigation must be filed in the jurisdiction where the defendant (in this case, the non-paying client) resides. The general rule is that a single contract with an out of state party is not enough to establish minimum contacts for personal jurisdiction over the non-resident defendant.

Where a court has no jurisdiction over the defendant, any judgment is a nullity. It would have no more legal effect than a printout of this thread would have! Since small claims court is designed as a "user-friendly" forum, it is quite possible that a helpful small claims court clerk would direct OP to file his civil action in the jurisdiction where the defendant resides.

But there is a vast body of law on this subject and many, many appellate court cases and law review articles and since I am not OP's lawyer, OP and/or his wife should (if they wish to pursue legal action) consult with their attorney. Of course, that may just be throwing good money after bad...

student
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Re: I'm owed $393; client won't pay; what are my options?

Post by student » Wed Feb 12, 2020 8:06 am

Is is possible the client missed the mail? Can you call the person?

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Re: I'm owed $393; client won't pay; what are my options?

Post by carolinaman » Wed Feb 12, 2020 8:12 am

Send a letter by registered mail indicating this is your final notice and demand payment. You can say the work was completed according to the contract and the client is required to pay. You can cite what the consequences may be: lawsuit, collections, lien on their property, etc. At the end of the letter, put CC: Attorney.

What I am suggesting is a bluff intended to get the desired response from the person. It may or may not work, but it is low cost and little effort to do. I once used this technique to get payment from a EVP at a large bank for work my company had done. He had made it clear he did not intend to pay but the letter convinced him to pay.

If the client ignores your letter, just drop it and move on. Next time, get payment in advance.

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JPH
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Re: I'm owed $393; client won't pay; what are my options?

Post by JPH » Wed Feb 12, 2020 8:22 am

You have a right to be paid, but it sounds to me like you are pushing it pretty hard. You have sent several emails in about a month. Do you really think it is time to escalate your demands further? In my experience demand for payment letters come about every month and threats of legal action after about 90 days. Don't needlessly offend the client by harassing them until you try to work it out in a friendly way.
While the moments do summersaults into eternity | Cling to their coattails and beg them to stay - Townes Van Zandt

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Re: I'm owed $393; client won't pay; what are my options?

Post by Nowizard » Wed Feb 12, 2020 8:43 am

We all want to be paid for our work. Depending on the overall success of your business, it is sometimes easier to simply consider a small loss an expense of doing business. In our business which involved filling insurance, we once went to a seminar on collecting debts. Early in the presentation, it was stated that money should never be refunded to a patient when insurance (Typically when client either had two policies or made an incorrect copayment) resulted in a balance unless requested. We left at the break. On a more positive note, we had a high level of payment, but it increased by approximately 8% in terms of quicker payment and fewer defaults when we began to include an addressed, return envelope with the invoice. A simple change with significant impact.

Tim

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dm200
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Re: I'm owed $393; client won't pay; what are my options?

Post by dm200 » Wed Feb 12, 2020 8:50 am

I know someone that used this "technique" to collect an amount due from a client. He hired one of those bicycle messengers to deliver the bill, etc. to the client at his work. The grubby, sweaty messenger made a very visible entrance to the guy's work area to make the delivery.

The client was "livid"!! BUT - he paid the bill.

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Re: I'm owed $393; client won't pay; what are my options?

Post by Katietsu » Wed Feb 12, 2020 8:59 am

I would say that you have been quite fortunate to be reacting this strongly to a payment that is only a month delayed. If the client has had serious health problems, it is even possible no one is even reading the email. I would send an invoice by mail and include a nice note. I have been involved with a few people facing serious health issues. There have always been bills that did not get paid on time and not because of a lack of intention or funds.

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Re: I'm owed $393; client won't pay; what are my options?

Post by fredflinstone » Wed Feb 12, 2020 9:59 am

Good advice, everyone. I will attempt to reach out to the client by U.S. mail and by phone and I guess one month really isn't very long.

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Re: I'm owed $393; client won't pay; what are my options?

Post by OldBallCoach » Wed Feb 12, 2020 10:03 am

dm200 wrote:
Wed Feb 12, 2020 8:50 am
I know someone that used this "technique" to collect an amount due from a client. He hired one of those bicycle messengers to deliver the bill, etc. to the client at his work. The grubby, sweaty messenger made a very visible entrance to the guy's work area to make the delivery.

The client was "livid"!! BUT - he paid the bill.
Back in the day Hells Angels used to provide an excellent service I am told...

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dm200
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Re: I'm owed $393; client won't pay; what are my options?

Post by dm200 » Wed Feb 12, 2020 10:10 am

fredflinstone wrote:
Wed Feb 12, 2020 9:59 am
Good advice, everyone. I will attempt to reach out to the client by U.S. mail and by phone and I guess one month really isn't very long.
By mail, send the notice "Certified - return receipt".

I would also revisit your policy of not getting paid (even if not the final amount) up front.

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Re: I'm owed $393; client won't pay; what are my options?

Post by adamthesmythe » Wed Feb 12, 2020 10:44 am

1. A month or so is nothing. Does your contract have a length of time to pay? Often that would be 30-60 days.

2. Hiring a lawyer over 400 bucks would be silly.

3. After a decent interval has passed, (maybe 60 days from first request) a certified mail demand letter would be the next step.

4. If no result from the demand letter, file in small claims in the customer's state or let it go.

5. Any business is going to have some bad debt. Build awareness of this possibility into your processes.

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Re: I'm owed $393; client won't pay; what are my options?

Post by unclescrooge » Wed Feb 12, 2020 11:08 am

I had surgery last year. Some of the bills didn't even get mailed until after 90 days.

Which created a ton of confusion as I thought I had paid half of them.

If she's sick, she may not even be opening bills. A polite phone call might go a long way.

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dm200
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Re: I'm owed $393; client won't pay; what are my options?

Post by dm200 » Wed Feb 12, 2020 12:46 pm

adamthesmythe wrote:
Wed Feb 12, 2020 10:44 am
1. A month or so is nothing. Does your contract have a length of time to pay? Often that would be 30-60 days.
2. Hiring a lawyer over 400 bucks would be silly.
3. After a decent interval has passed, (maybe 60 days from first request) a certified mail demand letter would be the next step.
4. If no result from the demand letter, file in small claims in the customer's state or let it go.
5. Any business is going to have some bad debt. Build awareness of this possibility into your processes.
In a previous life, I was involved in collecting past due amounts. Doing that, I primarily used and relied on certified mail - return receipt. When you send such "official" type letters, I suggest (I did this) sending TWO copies of each letter. You send the first one certified-return receipt. Then, wait a few days and send a copy by regular first class mail. In the text of the letter, note that a copy was sent non-certified and the original certified. What this accomplishes is that many folks ignore picking up or getting the certified letter. The regular mail copy, sent a few days later, gives the person the information in case they ignore the certified one. My experience with sending such letters is that repeating this every few weeks can eventually get positive results. Always include a stamped envelope for the person to mail the payment. Others that I know, or have known, in the collections business swear by the phone call method. Many, many, many years ago - I actually would go out and knock on doors - and actually got some money from a few folks.

In those far back days, I was involved with an organization that risked total failure because of non-payments. There were several of us working collecting - including knocking on doors. One other guy doing the same things I was doing knocked on the door of a woman that was very past due on her payments. He related that this woman came to the door dressed provocatively and invited him in to "discuss" the matter. He, very wisely in my opinion, chose to decline the invitation. Funny story. When I see him now, from time to time, we still discuss that "invitation" and his choice to 'decline" it.

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Re: I'm owed $393; client won't pay; what are my options?

Post by dm200 » Wed Feb 12, 2020 12:50 pm

unclescrooge wrote:
Wed Feb 12, 2020 11:08 am
I had surgery last year. Some of the bills didn't even get mailed until after 90 days.
Which created a ton of confusion as I thought I had paid half of them.
If she's sick, she may not even be opening bills. A polite phone call might go a long way.
A suggestion if you make phone calls - sometimes what works in such situations is to have two of you make calls to her - not at the same time, though. Sometimes the past due person perceives the other caller as an escalation of the collection effort. Sometimes what works is the "good cop - bad cop" method - such as "if you work this out with me, then you can avoid this escalating to XXX"

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Re: I'm owed $393; client won't pay; what are my options?

Post by chevca » Wed Feb 12, 2020 1:01 pm

fredflinstone wrote:
Wed Feb 12, 2020 6:29 am
I heard that the client has had some serious health problems recently. I have tried to be patient. I sent several polite emails requesting payment. No reply. It has been more than a month and I am concerned. I have never dealt with a problem like this. I don't think small claims court is an option, because the client lives out of state. It's "only" $393 but I am loathe to just write it off.
Not to be grim here. But, are we certain the client is still alive?

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Re: I'm owed $393; client won't pay; what are my options?

Post by HomeStretch » Wed Feb 12, 2020 1:06 pm

Good advice, above.

Your wife should accept future prepayment offers from clients.

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Re: I'm owed $393; client won't pay; what are my options?

Post by djpeteski » Wed Feb 12, 2020 1:08 pm

Small claims court is the answer to disputes of this nature. You file, and you present your evidence and the client responds. Typically there is a mediation required prior to the court date, and things may get settled there. In your case you are entitled to be reimburse filing fees and perhaps fees you already paid in collection attempts. Like postage of return receipt expected. Think of a Judge Judy type show with far less drama.

The key is how easy is it to collect a verdict if you win. This varies greatly by state. The way you present this, you should win. Then it is a matter of collection.

Limits to small claims court vary greatly by jurisdiction but are generally around $2,500 to $5,000.

Small claims is an option in the location the service was performed.

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Re: I'm owed $393; client won't pay; what are my options?

Post by adamthesmythe » Wed Feb 12, 2020 1:35 pm

djpeteski wrote:
Wed Feb 12, 2020 1:08 pm
Small claims court is the answer to disputes of this nature. You file, and you present your evidence and the client responds. Typically there is a mediation required prior to the court date, and things may get settled there. In your case you are entitled to be reimburse filing fees and perhaps fees you already paid in collection attempts. Like postage of return receipt expected. Think of a Judge Judy type show with far less drama.

The key is how easy is it to collect a verdict if you win. This varies greatly by state. The way you present this, you should win. Then it is a matter of collection.

Limits to small claims court vary greatly by jurisdiction but are generally around $2,500 to $5,000.

Small claims is an option in the location the service was performed.
Filing small claims has a relatively low cost and results in a summons being sent to the debtor.

It's probably the last, inexpensive, threatening-sounding thing you can do. It won't impress the sophisticated deadbeat but might prod the reluctant debtor to pay.

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Re: I'm owed $393; client won't pay; what are my options?

Post by fredflinstone » Wed Feb 12, 2020 2:12 pm

I called her today. We made small talk and then I said, "This is a little awkward, but..." Then asked her about the money. She said she hadn't seen any of my emails and will be forwarding the invoice to her colleague who will be sending me a check. She subsequently followed up via email and confirmed that her colleague will be sending a check. So hopefully the problem has been resolved. As usual, the Bogleheads came through with solid advice.

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Re: I'm owed $393; client won't pay; what are my options?

Post by lstone19 » Wed Feb 12, 2020 3:54 pm

fredflinstone wrote:
Wed Feb 12, 2020 2:12 pm
I called her today. We made small talk and then I said, "This is a little awkward, but..." Then asked her about the money. She said she hadn't seen any of my emails and will be forwarding the invoice to her colleague who will be sending me a check. She subsequently followed up via email and confirmed that her colleague will be sending a check. So hopefully the problem has been resolved. As usual, the Bogleheads came through with solid advice.
That she didn’t see them may or may not be true but if she’s using a mass market email provider (Yahoo, AOL, etc.), they very well may have tripped a spam filter and either directed to a spam folder or even deleted without notice (the empirical evidence has suggested if they decide the email you sent was spam, then you’re a spammer and aren’t entitled to be notified of non-delivery).

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Re: I'm owed $393; client won't pay; what are my options?

Post by movingon » Wed Feb 12, 2020 3:58 pm

I would ask about the health problems. I was in a similar situation when my mother was dying of cancer at home. Bills had gone unnoticed until I arrived.

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Re: I'm owed $393; client won't pay; what are my options?

Post by Jags4186 » Wed Feb 12, 2020 4:15 pm

FYI I think all of the advice about sending certified mail, registered, mail, etc. etc. is just a waste of money. Just because you send something certified or registered doesn’t mean jack. In fact, wasting money sending multiple certified or registered mail items over a $393 bill seems incredibly foolish to me.

Glad everything worked out, OP.

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Re: I'm owed $393; client won't pay; what are my options?

Post by chevca » Wed Feb 12, 2020 4:21 pm

Solid advice = try calling her on the phone.... man, what would people do without BHs... :oops: :happy

Glad it worked out. Remember, phones can still make phone calls.

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Re: I'm owed $393; client won't pay; what are my options?

Post by btq96r » Wed Feb 12, 2020 4:41 pm

I've been brainwashed by working in the medical field...I kept looking for "send/sell it to a collections agency and write it off" as advice.
Moderation is for Canadians.

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Re: I'm owed $393; client won't pay; what are my options?

Post by dm200 » Wed Feb 12, 2020 5:37 pm

Jags4186 wrote:
Wed Feb 12, 2020 4:15 pm
FYI I think all of the advice about sending certified mail, registered, mail, etc. etc. is just a waste of money. Just because you send something certified or registered doesn’t mean jack. In fact, wasting money sending multiple certified or registered mail items over a $393 bill seems incredibly foolish to me.
Glad everything worked out, OP.
My "collections" experience using such certified - return receipt letters was very good. I do not see such a modest expense for 2 or 3 such letters as a waste at all.

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Re: I'm owed $393; client won't pay; what are my options?

Post by MichCPA » Wed Feb 12, 2020 5:49 pm

djpeteski wrote:
Wed Feb 12, 2020 1:08 pm
Small claims court is the answer to disputes of this nature. You file, and you present your evidence and the client responds. Typically there is a mediation required prior to the court date, and things may get settled there. In your case you are entitled to be reimburse filing fees and perhaps fees you already paid in collection attempts. Like postage of return receipt expected. Think of a Judge Judy type show with far less drama.

The key is how easy is it to collect a verdict if you win. This varies greatly by state. The way you present this, you should win. Then it is a matter of collection.

Limits to small claims court vary greatly by jurisdiction but are generally around $2,500 to $5,000.

Small claims is an option in the location the service was performed.
Going to small claims court against a person with health problems after a month late without making a phone call is terrible form.

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Re: I'm owed $393; client won't pay; what are my options?

Post by adamthesmythe » Wed Feb 12, 2020 6:07 pm

Jags4186 wrote:
Wed Feb 12, 2020 4:15 pm
FYI I think all of the advice about sending certified mail, registered, mail, etc. etc. is just a waste of money. Just because you send something certified or registered doesn’t mean jack. In fact, wasting money sending multiple certified or registered mail items over a $393 bill seems incredibly foolish to me.
(I recognize OP's problem is solved. This is a general comment).

There are two excellent reasons to send a certified letter. One is to show that it's serious, which may work sometimes.

The other is to build a record in case it becomes necessary to go to small claims or other legal action. You would need to show that you have made a serious effort to collect by other means.

I agree that in all cases it is important to balance costs and effort with the amount owed.

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Re: I'm owed $393; client won't pay; what are my options?

Post by celia » Wed Feb 12, 2020 6:37 pm

Dear Fred,

There have been times I've been gone for several months and the mail just sat there and my email box was full. I've also had surgery and paying bills are low on my list. That's why we put most of our bills on automatic pay--they just get paid without us doing anything.

As for your one-time bill, as soon as I am able to get to it--and find it in the pig pile of mail (including tax forms, election mailers, local ads), I will pay you. I wish you had accepted my offer to pay beforehand. Now, with the way things are, please be patient with me.

--Wilma's favorite customer

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Re: I'm owed $393; client won't pay; what are my options?

Post by chevca » Wed Feb 12, 2020 6:46 pm

celia wrote:
Wed Feb 12, 2020 6:37 pm
Dear Fred,

There have been times I've been gone for several months and the mail just sat there and my email box was full. I've also had surgery and paying bills are low on my list. That's why we put most of our bills on automatic pay--they just get paid without us doing anything.

As for your one-time bill, as soon as I am able to get to it--and find it in the pig pile of mail (including tax forms, election mailers, local ads), I will pay you. I wish you had accepted my offer to pay beforehand. Now, with the way things are, please be patient with me.

--Wilma's favorite customer
You're not actually the customer brought up in this thread, are you?

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Re: I'm owed $393; client won't pay; what are my options?

Post by Unladen_Swallow » Wed Feb 12, 2020 6:54 pm

Never mind. Looks like it was solved with a phone call.

What an idea!
"I think it's much more interesting to live not knowing than to have answers which might be wrong." - Richard Feynman

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Re: I'm owed $393; client won't pay; what are my options?

Post by toofache32 » Wed Feb 12, 2020 9:02 pm

Maybe I missed it, but I don't think it's been resolved yet. He was told "the check is in the mail."

For smaller sums in my business not worthy of sending to a collection agency, I send them a 1099-C to report it to the IRS as a cancelled debt. They have to pay taxes on it. They can run from me, but they can't run from the IRS. Plus the warm and fuzzies....

mroe800
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Re: I'm owed $393; client won't pay; what are my options?

Post by mroe800 » Wed Feb 12, 2020 10:21 pm

Should have sent BamBam.

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Re: I'm owed $393; client won't pay; what are my options?

Post by CoastalWinds » Wed Feb 12, 2020 10:25 pm

Send Vinny and Gino to their residence.

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Re: I'm owed $393; client won't pay; what are my options?

Post by lkar » Wed Feb 12, 2020 11:20 pm

Might depend on what kind of services Wilma performs. Anything she can be sued over? For malpractice or negligence or anything like that? Is there a possible breach of contract claim?

Not asking if there is a valid claim. Just whether the possibility exists. Because deadbeat debtors when pushed into a corner can make life unpleasant. And loser pays provisions can be a disadvantage. If the debtor is collection proof, there can be lots of downside with little upside. Even if you win you lose and if you lose — say a dumb justice of the peace finds Wilma’s work was deficient — you lose double.

This is not legal advice. Free advice is worth what you pay for it. Sometimes less. Just a few ruminations that might be worth considering.

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Re: I'm owed $393; client won't pay; what are my options?

Post by Financologist » Wed Feb 12, 2020 11:37 pm

The person is ill? Leave him/her alone. They may pay eventually anyhow.. charity takes on different forms.

Someone very close to me became ill and also had psychological problems. He became incapable of managing his affairs.

Three years later, when I realized what was happening, I helped him. Eventually we settled all outstanding debts for 100 cents on the dollar.

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Re: I'm owed $393; client won't pay; what are my options?

Post by toofache32 » Wed Feb 12, 2020 11:49 pm

Financologist wrote:
Wed Feb 12, 2020 11:37 pm
The person is ill? Leave him/her alone. They may pay eventually anyhow.. charity takes on different forms.

Someone very close to me became ill and also had psychological problems. He became incapable of managing his affairs.

Three years later, when I realized what was happening, I helped him. Eventually we settled all outstanding debts for 100 cents on the dollar.
You're obviously not a business owner. Will you allow your employer to pay you 3 years later for work you do now? A business is not a charity. Charity is CHOSEN and not forced. The business owner has to be able to make sure all employees can be paid. And make sure all bills are paid to vendors/supplies, etc. There are many reasons why a client can "fall on hard times" but it doesn't cancel their financial obligations and is irrelevant to their obligations. Even in death, claims are made to an estate.

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Re: I'm owed $393; client won't pay; what are my options?

Post by Financologist » Wed Feb 12, 2020 11:53 pm

toofache32 wrote:
Wed Feb 12, 2020 11:49 pm
Financologist wrote:
Wed Feb 12, 2020 11:37 pm
The person is ill? Leave him/her alone. They may pay eventually anyhow.. charity takes on different forms.

Someone very close to me became ill and also had psychological problems. He became incapable of managing his affairs.

Three years later, when I realized what was happening, I helped him. Eventually we settled all outstanding debts for 100 cents on the dollar.
You're obviously not a business owner. Will you allow your employer to pay you 3 years later for work you do now? A business is not a charity. Charity is CHOSEN and not forced. The business owner has to be able to make sure all employees can be paid. And make sure all bills are paid to vendors/supplies, etc. There are many reasons why a client can "fall on hard times" but it doesn't cancel their financial obligations and is irrelevant to their obligations. Even in death, claims are made to an estate.
Tsk tsk.. A wise business owner takes her reputation into account. She also takes the cost of collection into account. Do the math on a $393 receivable with a sick out of state client. Forest.. meet trees.

toofache32
Posts: 1962
Joined: Sun Mar 04, 2012 6:30 pm

Re: I'm owed $393; client won't pay; what are my options?

Post by toofache32 » Thu Feb 13, 2020 12:58 am

Financologist wrote:
Wed Feb 12, 2020 11:53 pm
toofache32 wrote:
Wed Feb 12, 2020 11:49 pm
Financologist wrote:
Wed Feb 12, 2020 11:37 pm
The person is ill? Leave him/her alone. They may pay eventually anyhow.. charity takes on different forms.

Someone very close to me became ill and also had psychological problems. He became incapable of managing his affairs.

Three years later, when I realized what was happening, I helped him. Eventually we settled all outstanding debts for 100 cents on the dollar.
You're obviously not a business owner. Will you allow your employer to pay you 3 years later for work you do now? A business is not a charity. Charity is CHOSEN and not forced. The business owner has to be able to make sure all employees can be paid. And make sure all bills are paid to vendors/supplies, etc. There are many reasons why a client can "fall on hard times" but it doesn't cancel their financial obligations and is irrelevant to their obligations. Even in death, claims are made to an estate.
Tsk tsk.. A wise business owner takes her reputation into account. She also takes the cost of collection into account. Do the math on a $393 receivable with a sick out of state client. Forest.. meet trees.
I agree it's best to collect up front because there is no repo man for most industries. Unfortunately. While businesses should account for losses, they should also do what they can to minimize losses. This includes requiring payment for services rendered despite health issues which are irrelevant to debts owed. Reputation? When deadbeats don't pay, the business is not interested in having their deadbeat friends as future clients. Birds of a feather....

I ask again, are you a business owner with employees and their families relying on you to pay them? It's easy to make armchair decisions when it's not your hard-earned money at stake and you get paid regardless. What skin in the game do you have when you get paid regardless? Again, do you allow your employer to pay you 3 years later?? Mine don't. You only have to take out a loan once to meet payroll for this concept to sink in.

Financologist
Posts: 202
Joined: Wed Jan 01, 2020 11:16 pm

Re: I'm owed $393; client won't pay; what are my options?

Post by Financologist » Thu Feb 13, 2020 8:56 am

toofache32 wrote:
Thu Feb 13, 2020 12:58 am
Financologist wrote:
Wed Feb 12, 2020 11:53 pm
toofache32 wrote:
Wed Feb 12, 2020 11:49 pm
Financologist wrote:
Wed Feb 12, 2020 11:37 pm
The person is ill? Leave him/her alone. They may pay eventually anyhow.. charity takes on different forms.

Someone very close to me became ill and also had psychological problems. He became incapable of managing his affairs.

Three years later, when I realized what was happening, I helped him. Eventually we settled all outstanding debts for 100 cents on the dollar.
You're obviously not a business owner. Will you allow your employer to pay you 3 years later for work you do now? A business is not a charity. Charity is CHOSEN and not forced. The business owner has to be able to make sure all employees can be paid. And make sure all bills are paid to vendors/supplies, etc. There are many reasons why a client can "fall on hard times" but it doesn't cancel their financial obligations and is irrelevant to their obligations. Even in death, claims are made to an estate.
Tsk tsk.. A wise business owner takes her reputation into account. She also takes the cost of collection into account. Do the math on a $393 receivable with a sick out of state client. Forest.. meet trees.
I agree it's best to collect up front because there is no repo man for most industries. Unfortunately. While businesses should account for losses, they should also do what they can to minimize losses. This includes requiring payment for services rendered despite health issues which are irrelevant to debts owed. Reputation? When deadbeats don't pay, the business is not interested in having their deadbeat friends as future clients. Birds of a feather....

I ask again, are you a business owner with employees and their families relying on you to pay them? It's easy to make armchair decisions when it's not your hard-earned money at stake and you get paid regardless. What skin in the game do you have when you get paid regardless? Again, do you allow your employer to pay you 3 years later?? Mine don't. You only have to take out a loan once to meet payroll for this concept to sink in.
Respectfully disagree with your assessment. Business owners time and energy are invaluable. How much time and energy will be spent trying to make a small collection. And what is the opportunity cost?

Would also reserve judgment about an ill client. The original offer to pay upfront suggests this is likely not a "deadbeat."

I also wouldn't be so quick to characterize my valued client and his associates. Birds of a feather indeed.

In this case probably best to hang back for a couple of months before making a final respectful attempt at collection.

My input is based on ~20 years in lending which has involved more than my fair share of collections.

DaveinMtAiry
Posts: 3
Joined: Fri May 13, 2016 2:29 pm

Re: I'm owed $393; client won't pay; what are my options?

Post by DaveinMtAiry » Thu Feb 13, 2020 9:06 am

You stated that the client has serious health issues. I think you've got your answer as to why you haven't been paid. I don't think it's any more than that, the phone call or certified mail may be your best option

tibbitts
Posts: 9520
Joined: Tue Feb 27, 2007 6:50 pm

Re: I'm owed $393; client won't pay; what are my options?

Post by tibbitts » Thu Feb 13, 2020 9:42 am

toofache32 wrote:
Thu Feb 13, 2020 12:58 am
Financologist wrote:
Wed Feb 12, 2020 11:53 pm
toofache32 wrote:
Wed Feb 12, 2020 11:49 pm
Financologist wrote:
Wed Feb 12, 2020 11:37 pm
The person is ill? Leave him/her alone. They may pay eventually anyhow.. charity takes on different forms.

Someone very close to me became ill and also had psychological problems. He became incapable of managing his affairs.

Three years later, when I realized what was happening, I helped him. Eventually we settled all outstanding debts for 100 cents on the dollar.
You're obviously not a business owner. Will you allow your employer to pay you 3 years later for work you do now? A business is not a charity. Charity is CHOSEN and not forced. The business owner has to be able to make sure all employees can be paid. And make sure all bills are paid to vendors/supplies, etc. There are many reasons why a client can "fall on hard times" but it doesn't cancel their financial obligations and is irrelevant to their obligations. Even in death, claims are made to an estate.
Tsk tsk.. A wise business owner takes her reputation into account. She also takes the cost of collection into account. Do the math on a $393 receivable with a sick out of state client. Forest.. meet trees.
I agree it's best to collect up front because there is no repo man for most industries. Unfortunately. While businesses should account for losses, they should also do what they can to minimize losses. This includes requiring payment for services rendered despite health issues which are irrelevant to debts owed. Reputation? When deadbeats don't pay, the business is not interested in having their deadbeat friends as future clients. Birds of a feather....

I ask again, are you a business owner with employees and their families relying on you to pay them? It's easy to make armchair decisions when it's not your hard-earned money at stake and you get paid regardless. What skin in the game do you have when you get paid regardless? Again, do you allow your employer to pay you 3 years later?? Mine don't. You only have to take out a loan once to meet payroll for this concept to sink in.
I was a business owner and one time I had an out of state customer not pay a bill for a similar amount for no good reason. It was a good customer I'd worked for many years. In this case they could have paid but simply refused to - no health issues were involved. Although they offered me opportunities after that, I chose to not work for them again. In this case it could be just a temporary issue delaying payment - and I occasionally had to go many months before getting paid by other customers. Also in most businesses, you can insist all you want on getting paid up front, and that will solve all your problems, because you'll be out of business pretty much instantly. Sometimes you can get a PO number, etc. but getting paid up front... never heard of that happening in my business. You can "not allow" a customer to not pay you late etc. but what exactly are you going to do in this situation?

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