How to collect from a deadbeat?

[techyguy717]

A customer has owed me money for exactly 1 year now. I repaired their laptop to be like new, with new parts. They were a friend of a friend and I forgot to put terms of payment on the receipt. (What happens if they don't pay.)

I email and call them, but they continue to tell me they don't have the money. They admitted to paying off their college bill and starting their own company, while they still owed me money. They told me by Email.

What can do to collect, after 1 year of this deadbeat putting me off. Am I legally able to report the parts I sold as stolen? Can I charge interest? I'm tired of wasting time. 1 year of no payment is excessive, even though I forgot to put terms of payment on the bill.

 

[pceinc]

Consult a small business attorney in your state. How much money are you out? If it's only a couple of hundred your probably wasting your time.

 

[lan101]

My father has always told me that if its less than $500 (US dollars) than it's probably not worth pursuing financially speaking. If it's just out of pure principal, than that's up to you to decide.

Since there was no terms, I don't see how there is anything to go on. Receipts or invoices of parts maybe??

I am in a small community, so even I am guilty of not always giving my terms document out when doing service. I believe a lot of older folks in my area would be turned off by this. I also feel that most of them are going to pay me though.
If I am dealing with people in my generation, than I usually give it out upfront and explain it. If I am selling them a new computer, or really anything part wise than they will always get a terms sheet.

I think a lot of low life people out there realize that folks won't pursue small amounts of money owed, so therefore they exploit that.

 

[Cornerstone Technologies]

You made several mistakes that you can avoid in the future.

1. Take a deposit on any parts to be ordered. I typically do 50% of the retail value, which almost nearly covers the parts cost. This ensures that you are not working with a deadbeat and get paid for the part. If they cant pay, then don't order the part. Its simple, and this alone usually weeds out timewasters and deadbeats.

2. Never return a machine unless the invoice is paid. Times are tough, but you still have bills. Try not to fall for every sob story that people tell you. Once the machine leaves your possession, you lose all control over the situation.

3. Have proper terms and procedures.

It happens, but learn from the mistakes.

 

[lsi]

You made several mistakes that you can avoid in the future.

1. Take a deposit on any parts to be ordered. I typically do 50% of the retail value, which almost nearly covers the parts cost. This ensures that you are not working with a deadbeat and get paid for the part. If they cant pay, then don't order the part. Its simple, and this alone usually weeds out timewasters and deadbeats.

2. Never return a machine unless the invoice is paid. Times are tough, but you still have bills. Try not to fall for every sob story that people tell you. Once the machine leaves your possession, you lose all control over the situation.

3. Have proper terms and procedures.

It happens, but learn from the mistakes.

all helpful advice in hindsight but on to the real question: what can you do about it now?

1. start sending bills with interest added
2. show up and ask for payment
3. notify them that the acct will be sent to collections where more fees and interest will be due
4. send them to collections (there are several companies that will buy it on the chance to collect even if you don't have paperwork -- the more aggressive the company the better your chances)
5. retain a lawyer to draft a threatening letter
6. take them to small claims court

of course you have to decide if any of this is even worth your time. I've been burned by several companies that end up sending me the dreaded bankruptcy letter from their lawyer. Not much you can do at that point.

 

[gikstar]

Seems to me that it's time to go knocking on their front door... business or home. May as well drag your 'friend' along with you.
Got no cash?, Let him pay with his credit/debit card or even a check.

 

[coffee]

Immediately take them to small claims court. The rules differ from state to state but here it costs 100 bucks to take someone to SCC. If you win you can also get them for the cost also.

I would do it out of spite. I dont care how much the amount is and if they have the ability to pay. But if you win you can also proceed with garnishing their pay and also ding their credit rating.

 

[lsi]

Just be aware that even if you get a judgement they can still not pay that as well

 

[300DDR]

I've had a few clients not pay. Needless to say, I still have their hard drives and charge $10/day after 14 days "storage fee" (I've never actually charged this to people who keep in contact with me and really do want to pickup their data). I'm sure they will not be picking up, but I hold onto their drives just in case.

The one time I had a bounced check (where the client wasn't immediately sorry and paid again), it was some actress chick. She basically refused to pay, I don't remember why, she clearly had money. It's true, if under $500, you can only go to small claims court, and that means missing work.

SOOOO… using my web design and SEO knowledge, I made a website with her full name mentioned MANY times and pictures of her bounced check. Within 1 week I got a call from her saying "please take down that website, my agent is mad at me now that I didn't pay you." I got lucky that she was an actress (or at least someone that cares about what comes up when you google their name). The next day I got payment and took the page down. Couldn't have worked better, and I felt pretty damn good!!

 

[techyguy717]

Thank You

I now put the terms of service on all of my receipts. I understand that some businesses see this as a good thing. (They know I am a serious business) While if anyone is weary about the "lawyer claims", I say that this is a standard agreement that guarantees payment and warranty for you.

Since I was lax on making sure the terms were on every receipt a year ago, I think my best course of action would be a collection agency?

Yes I have:
- A signed receipt
- Parts bills

I know that going to a court would not necessarily result in payment.

I have noticed that since updating my terms and putting on every receipt, payments have been more prompt. (Usually immediately)

Although my terms are very strict on entities that don't pay, I do give 30 days to pay. (Good for businesses) But the charges will quickly rack up after that, all according to my state law.

 

[RedFoxComp]

SOOOO… using my web design and SEO knowledge, I made a website with her full name mentioned MANY times and pictures of her bounced check. Within 1 week I got a call from her saying "please take down that website, my agent is mad at me now that I didn't pay you." I got lucky that she was an actress (or at least someone that cares about what comes up when you google their name). The next day I got payment and took the page down. Couldn't have worked better, and I felt pretty damn good!!

That's great! Must have been really satisfying.

 

[codegreen]

I know that going to a court would not necessarily result in payment.

Don't be so sure. If you are awarded damages plus court costs, and you follow through on filing your claim, this will show up any time this guy tries to borrow money for a financial institution. If he's getting a business going, that would put a major cramp in things for him.

I'm not a lawyer, different jurisdictions, your mileage may very, etc, etc.

 

[codegreen]

Also, while not directly applicable to your situation, it got me thinking about this story. Wouldn't you love to march into a non-paying bank with the sheriff and seize their property?

 

[coffee]

Ok, I had a customer at one time call for service. I got there and it was a pretty old lady with 2 computers. I removed a bunch of virus related stuff and cleaned it up software wise. Then I wrote out the bill. Spent an hour on site.

She had the gaul to sit in her recliner and give me the sad story "Gee, I dont have any money" (background - Prices are discussed on the first phone call). I looked at her and with evil eyes said "Thats going to be a problem then Grandma". She got scared and started ruffling thru her purse and produced money but 20 bucks short. Just then her daughter showed up and I pressed her for payment or I was going to take the computer. She wrote me a check that bounced to high heaven!

I nailed them with a 50.00 bounce fee. I pressed them for payment and threatened court action and she finally made good on the check.

If I find out on site that you dont intend to pay for some reason then I will take the computer. Normally when I start unhooking the computer they seem to come up with money.

Believe it or not the worst offenders I have for non payment are the 3rd party companies and Homeland Security. I dont do service for them anymore. If asked why I just tell them "From my experience I dont get paid". I could ask for a deposit up front but I dont want to work for just the deposit.

Best Regards,

Coffee

 

[nesrinamb]

You do need to consult your lawyer on this since the rules are so different from state to stare.

In some states you can claim it as theft of service and here in California you have the right to reposes the property.

 

[Tucson Techie]

I've also got burned once by a third-party company. You need to be careful about any sub-contract work from a 3rd party, especially an out of city or out of state company. I don't do any kind of sub-con work anymore. If I did I would certainly demand payment upfront.

I had a deadbeat customer once, a former coworker when I was a sys admin, who didn't pay me for a year and a half. I finally emailed him a nasty gram and threatened small claims court and I got paid a week later. Sometimes you have get aggressive, if only in words.

 

[dgast]

Credit rating

Immediately take them to small claims court. The rules differ from state to state but here it costs 100 bucks to take someone to SCC. If you win you can also get them for the cost also.

I would do it out of spite. I dont care how much the amount is and if they have the ability to pay. But if you win you can also proceed with garnishing their pay and also ding their credit rating.

I like the idea of going to SCC, but better yet tell them you will send the bad credit information to Dunn & Bradstreet that could bite them in their business, also going to Equifax and Transunion for credit reporting is good also for personal credit. There is a third company for personal credit reporting but the name escapes me right now. I would check but you probably can notify them of payment terms by written letter even though it is not on your invoice.

Good Luck,

 

[Paul Rodgers]

The first course of action is to refuse to do business with them until they pay you the balance owed.

 

[NETWizz]

I now put the terms of service on all of my receipts. I understand that some businesses see this as a good thing. (They know I am a serious business) While if anyone is weary about the "lawyer claims", I say that this is a standard agreement that guarantees payment and warranty for you.

Since I was lax on making sure the terms were on every receipt a year ago, I think my best course of action would be a collection agency?

Yes I have:
- A signed receipt
- Parts bills

I know that going to a court would not necessarily result in payment.

I have noticed that since updating my terms and putting on every receipt, payments have been more prompt. (Usually immediately)

Although my terms are very strict on entities that don't pay, I do give 30 days to pay. (Good for businesses) But the charges will quickly rack up after that, all according to my state law.

You have to be able to prove the debt. A collection company will probably not offer you much money unless you have ALL the signed paperwork. If everything is signed, they will generally offer you a percentage of what they collect.

Some companies pay up front.. other companies pay contingent upon collecting the debt.... Good Luck.


I think your paperwork was poor and you waited too long to pursue this though, so you have hurt your chances of collecting. That said, I do not know the statute of limitations or collections procedures for your state. To find that out you will need to consult with a collections company or a lawyer. Either way it is going to cost you money to collect money at this point...

Maybe you can write it off?

 

[300DDR]

Either way it is going to cost you money to collect money at this point...

Not if you try my website technique, it's worth a shot anyhow Just write up a page describing everything that happened, using lots of keywords and their name, also your location/city. Hopefully the client has a somewhat unique name.