Collections 90+days past due

[Kdog76]

It's probably been answered elsewhere in the forum, but I'll ask anyways. I've got a guy 90+ days past due on a balance around $1500, and within 30 days for about $250. He's a landlord, so I didn't want to use a lien, because I don't think he's getting rid of any properties. I am thinking small claims. State limit is $5000.
I've given him notices at the 30,60 and 90 day mark. He promised a partial check about the 5th, today's the 15th! I am thinking sending him a copy of the small claims suit, but not filing it right away - to see if he coughs it up. Not worried about losing this customer, he's a PITA to collect from every time, even though he has always paid in the past (but always past 90 days, & w/ a lot of hounding on my part).
Any thoughts?

 

[480sparky]

If he's good for the work but not the payments, next time he needs work done, demand prepayment.

 

[Kdog76]

I sure will. The guy has already been talking the talk about more work he needs done. If we get paid up & I do the work I know I will be in the same boat 90 days out again... Prepayment is the only way I'd do work for him anymore. He's the only customer that I've had to deal this way with, but it's a good learning experience. I think it's something I've got to learn how to deal with. CYA, right?

 

[zappy]

check out this web site www.commercialinvestigations.net

 

[480sparky]

I sure will. The guy has already been talking the talk about more work he needs done. If we get paid up & I do the work I know I will be in the same boat 90 days out again... Prepayment is the only way I'd do work for him anymore. He's the only customer that I've had to deal this way with, but it's a good learning experience. I think it's something I've got to learn how to deal with. CYA, right?

If he has more work coming up, just tell him you need to get paid for what you've already done, plus a deposit on the next project, before you can begin.

I think I've had enough practice doing electrical. I need to get paid now.

 

[Kdog76]

The question now is, do I sit on the account until he needs more work done? I'd rather put some teeth into my collections attempt. I'd like to give him the idea I'm not afraid to go into small claims...Or at least give him the idea that one way or another I WILL get paid. (Several phone calls haven't done much. Either I get voicemail, or if he answers It'll be a "Yep, I'm going to get that check out to you." I don't want to play the phone game much anymore.

 

[Sonny Boy]

Try a collection agency.

 

[Kdog76]

Try a collection agency.

They'll take about 30% won't they? I'd rather do a small claims. And I double checked here - the amount owed here is > $1600.

 

[growler]

Go and talk to the court clerk about filing in small claims court. If they want to these people can give you a world of advice about collecting in small claims court. Here I was advised to never extend credit to an individual or company and never accept partial payments or let anyone post date a check.

As long as you demand payment in full even if the check bounces you have a case but if you extend credit it's a whole different ball game.

Check and see what the laws are in your state. If you are not carefull some of these people will understand the laws better than you do and will use loop holes to keep from paying or to delay payment for as long as possible.

 

[480sparky]

The question now is, do I sit on the account until he needs more work done? I'd rather put some teeth into my collections attempt. I'd like to give him the idea I'm not afraid to go into small claims...Or at least give him the idea that one way or another I WILL get paid. (Several phone calls haven't done much. Either I get voicemail, or if he answers It'll be a "Yep, I'm going to get that check out to you." I don't want to play the phone game much anymore.

Don't sit on it. Get aggressive in your collection attempts. Sounds like small claims is the way to go.

 

[tyha]

the very few times we do little work like this for landlords and the like that wont pay on time. we send them a letter stating that the balance is about to go up for the finance and service charges in like 5 days or so if we are not paid in full. that usually does the trick because they usually always have the money but they dont see any harm in holding on to it until you let them know that it is about to cost them even more money.

 

[CopperTone]

do you have a signed contract?

On every invoice we send out it says 1 1/2 % interest due every 30 days over. Usually after one of those 30 day late fee, we get the money - sometimes they pay the fee sometimes they don't - we don't push the issue.

I fax bills, mail bills, make phone calls, send emails. Be respectful but relentless - it works. Threaten to file a complaint with the better business bureau, the town, the state, anyone.

A letter from your lawyer demanding payment scares some people, which will cost you some money.
Small claims works well too.

You probably will sour the relationship with these methods but do you really want to work for him anymore anyway?

in massachusetts you can sue for interest, court fees, and lawyer fees up to a total of $2000.00 - pretty easy to file the form - go to the clerk's office and ask for help

Problems like this are best suited to get your money anyway you can and never do work for them again.

I had a property owner slow pay me for 6 months - I called him every single day until he was so sick of seeing my number come up on his phone - he paid. The funny thing was 2 years later he called me to do more work for him - I told him - paid in full up front cash - never heard from him again.

I sleep much better at night now.

 

[mengelman]

I have had several small claims judjments over the years and have never collected a penny. These guys know they dont have to pay.
Here in Texas if you wait over 90 days on residential or 120 days commercial you are not allowed to file a lean. Protection is on the side of the consumer.

 

[Kdog76]

do you have a signed contract?

No. It is an extra step & a bit of a hassle to get a signed contract on every little job I do. Not that I couldn't. Most shops around here don't on service calls. Sometimes they will get the call from a non-present owner (e.g. landlord out of town, business owner in another city etc.)

You probably will sour the relationship with these methods but do you really want to work for him anymore anyway?

Not really. And, IMO he's the one who soured it, not me.

Thanks for all the input. I think I will get the small claims paperwork started, and send him a copy. I won't file it right away, and see if he pays. As far as invoicing the 1.5% on the past due IMO it's a little too late to do that. I would like to send a last reminder with an extra charge for the additional paperwork / time spent in the office, but I never mentioned any of that in the original invoice.

I have heard of guys using the $50 or so extra charge on each statement that is generated past 30 days. Maybe time to start in this kind of thing in the future.

BTW, in Wisconsin we have 6 months to file a lien.

 

[Kdog76]

I have had several small claims judjments over the years and have never collected a penny. These guys know they dont have to pay.
Here in Texas if you wait over 90 days on residential or 120 days commercial you are not allowed to file a lean. Protection is on the side of the consumer.

If you got the judgement, that's only the first step, right? You then have to file additional paperwork in order to garnish w-2 wages, or bank accounts. Just wondering if you got the judgement, did you not file the additional paperwork for collections via garnishments?

 

[mengelman]

As far as I have been able to find out the judjment puts a lien on his real property for 7 years. If they dont sell anything for 7 years you dont get anything. You have to remember to refile at the end of the 7 year period.

 

[G & G Electric]

Don't sit on it. Get aggressive in your collection attempts. Sounds like small claims is the way to go.

I totally agree. This guy may be a landlord with all kinds of work, but if he's not paying you then all that is meaningless. He should understand. If he has a tenent that is overdue too long I'm sure he wouldn't think twice about evicting them. Go after your money.

 

[G & G Electric]

Also, an old boss of mine had a stipulation in his contracts that stated the material belonged to him until the customer paid in full. I know for a fact he has gone and removed panels from houses due to non payment. Don't quite know the legality of it, but the suckers would sign the contract and not pay, and my boss would return with materials wrecked out of the house.

 

[Kdog76]

Also, an old boss of mine had a stipulation in his contracts that stated the material belonged to him until the customer paid in full. I know for a fact he has gone and removed panels from houses due to non payment. Don't quite know the legality of it, but the suckers would sign the contract and not pay, and my boss would return with materials wrecked out of the house.

Pretty sure that wouldn't fly around here. And, in WI a lien has to be renewed every year - not sure how many years that can go on. And, I don't get the money until he sells a property- which I wouldn't bank on.

 

[satcom]

Also, an old boss of mine had a stipulation in his contracts that stated the material belonged to him until the customer paid in full. I know for a fact he has gone and removed panels from houses due to non payment. Don't quite know the legality of it, but the suckers would sign the contract and not pay, and my boss would return with materials wrecked out of the house.

The right way to be sure to get your money is get it before you leave the home.

In the state I live and many others, removing installed material, no matter what your contract says, will get you some serious time in the lock up, and the owner can file a civil complaint and be awarded all costs and damages, plus whatever the judge awards for you being a dummy.