Hiring an attorney for a $12K job is a waste imo.
Most of us are not wealthy, and $12K is a lot of money. If someone were to steal $12K it could be criminal in many states.
Hiring an attorney for a $12K job is a waste imo.
I don't know what the limit is but here in WI we have a small claims court. I don't know if $12K would qualify.
Make sure that you are aware of the state statutes which may have a damage clause also. I took a land lord to small claims court 23 years ago because he would give me my security deposit back which was $600. He said to suit him and I did. Got the $600 + he paid for himself getting served at work by the sheriff, court costs, plus double damages bring his cost up to about $1,500. Well, he said to just sue him and I did. There was a lien palced on his property be the court until he paid. He paid fairly quickly but the lien was overlooked until 10 years later and I had to sign off on it.
Personally I would look into doing this thing yourself. If you have the documentation and you know the state statutes that were violates there is no reason pa pay an attorney big bucks. But be specific in the statutes that were violated. List them. They may be liable for damages for violating a contract.
Don't let is scare you.
I think 12k is a bit more then a small claim but worth looking into since every state has different limits, and if he is incorporated then in most states he will need a lawyer to represent him in any court including small claims.
Yup, but that could end up costing some real money in court costs and legal fees. It's a shame he has to jump all the hoops.In many states the guy being sued has the option of having the case transferred out of small claims court into a regular court room too.
Hiring an attorney for a $12K job is a waste imo.
Good luck!
That's what I was going to say, also when you do that it helps me and when I do it it helps you, if they're not getting away with it they might not try as often.. . . I would rather let an attorney have all $12K then let someone get off with paying nothing for something they owed me for.
I don't know what the limit is but here in WI we have a small claims court. I don't know if $12K would qualify.
in california, you are limited to $5,000, max award in small claims.
so, if you have no other options, you could sue them here, but no matter what they owed you, your maximum
award would be $5,000 in small claims court. you could deduct the rest off your taxes as a bad debt,
but that's about it.
so if someone owed you $12k, you could sue them for $5k of it in small claims court, and probably win.
then all you have to do is collect it.
half the time, on something like this, they might not even bother to respond, giving you a default judgement.
then you can lien real property, and use whatever mechanisms at your disposal to force them to pay, or
sieze assest with further court action, etc.
and, at some point, the time spent chasing the deadbeats will be more than it would take to just go
earn that money working for someone who pays you.
so, you deduct the full amount of the loss, plus collection costs that you can document,
(your hourly rate times the amount of hours you spent chasing this) from your taxes.
say, for the purposes of argument, it's $12k + $2k.... $14,000 deduction.... and your tax rate is $15%,
federal and state, so your tax goes down $2,100.
that makes the amount you are really out of pocket, $9,900.00
how long does it take to earn $9,900.00? that is the point where it costs you more to chase this than
it's worth. that's the problem... oftentimes the person owing you knows better than you do where
most people will just walk away, and counts on it.
sometimes, they hope you will just sue them in small claims court... in the above scenario, they
don't even bother to respond, you get a $5k default judgement against them, and they send you
a check for $5k eventually, or when you chase them down and get it.
they just settled a $12,000 bill for $5,000.
It certainly is apparent that he should just write it off an to much wasted time trying to collect, even though he does win either in small claims court or otherwise he is still left with collecting it.
It is likely not a tax deductible 'bad-debt' until there is a court judgement.
I had a contractor stiff me for $10K work on my house. $800 in legal fees + 2hours of my time = $30K judgment. So, total cost turned out to be $10.8K which was tax deductible at about 27%. End result: only lost $6.8K, still have outstanding judgement, hope he wins the lottery
It is likely not a tax deductible 'bad-debt' until there is a court judgement.
I had a contractor stiff me for $10K work on my house. $800 in legal fees + 2hours of my time = $30K judgment. So, total cost turned out to be $10.8K which was tax deductible at about 27%. End result: only lost $6.8K, still have outstanding judgement, hope he wins the lottery
But you can still go to court and get a judgement. An unpaid judgement can be treated as a 'bad debt loss' and it may be subtracted from your income, thus reducing your tax liability.If you operate on a cash based accounting system you do not have a "bad debt" expense. You simply have no income to record for the incident, you still have (hopefully) paid your expenses related to the incident you just have no offsetting or profiting income related to the incident.
Most accountants would use 12 months (1 year) as the time frame.If you operate on an accrual based accounting system then you have recorded the income as soon as you generated a sales invoice, or other sales document. At some point if you decide you likely will not be paid you can expense what you have not been paid.
I penned in a revision to their contract stating that full payment was due upon completion of the final punch list, dated with the project managers approval. Unfortunately they have not been prompt on any of their paperwork for us so now that we are at the end of the job I wanted to force the issue, and make sure we were covered. Further more, I thought I might even "threaten" taking this to their client (a very large cellular service provider, one that they are trying to impress) and let them know that this GC has not been following through on their paperwork
I worked for one co. where 1 of the guys was a bit rough & tough. It was said that the owner sent him to collect from difficult customers & he got results.