# How To Collect Debt



## snomover (Dec 31, 2010)

Long story short, looking for collection advice. Last year we were a sub for another company. They stopped paying after last storm and never finished paying. They owe us over 12k What would you do? I've never been in this position before.


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## Cover Guy (Sep 30, 2009)

Take them to court


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## snomover (Dec 31, 2010)

Cover Guy;1529305 said:


> Take them to court


I get that, I was looking for a less expensive route. Represent yourself? Hire a Lawyer? From what I know, they formed a Corporation and it doesn't own Jack! I also know they owe money to other contractors. But, I know they got paid.


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## grandview (Oct 9, 2005)

You maybe out of luck if a year passed and you filed no type of claim in a court. But fine a lawyer and see if he'll collect it for a percent of the money instead of paying him outright.


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## Mr.Markus (Jan 7, 2010)

Simple letter to the paper about your plight and why you can't afford to buy your children Christmas presents this year. CC The CEO of the Corporation. (Don't send the letter to the paper.)


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## joe2025 (Nov 26, 2010)

You could try to file a court action through your local magistrate office. Most local courts have a max. On the amount of money you can file a suit for, usually $10,000. Each state is different so I would check first. You’ll be giving up $2,000 up front but it will cost you that much in attorney’s fees alone let alone the filing charge and all the other good big boy court stuff. The problem with winning is you still have to collect the money and that could take a long time if at all. At a minimum you’ll have a legal document in your hands that states that they owe you the money and you could then file a lean against the company. Again you may never get paid. Had a similar problem and that is the way my lawyer said would be the cheapest. Your only other alternative is to chalk it up to experience, move on and try to change things so you don’t get screwed again in a similar situation.


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## ducaticorse (Oct 16, 2012)

Court. ..........


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## snomover (Dec 31, 2010)

Even if we go to court and say I did get judgement for a certain amount. How do I then collect? As far as I know they are still not forced to pay from what i've read, and been told.


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## jhenderson9196 (Nov 14, 2010)

If the Corp was formed after the debt was incurred, I think the person who hired you can be held personally responsible. File civil suit. You can't avoid the judgement in civil court. Even by declaring yourself bankrupt.


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## joe2025 (Nov 26, 2010)

snomover;1529397 said:


> Even if we go to court and say I did get judgement for a certain amount. How do I then collect? As far as I know they are still not forced to pay from what i've read, and been told.


Like I said before, good luck trying to collect the money. Even if you win, if they do not want to pay you, you're not going to see any money from them. Even if you both had lawyers involved and they made an agreement to pay you, if they refuse to pay it will be a long drawn out and very expensive process to try and force them to pay. Talk to a lawyer about it and I'm sure they will tell you the same thing. You "might" get half the money when it's all said and done. Like jhenderson9196 said, if it was not a corp when you did business with them you can try a civil suit. But if the person you were doing business with is married then that throws another obstacle into the equation as to what they own and what is jointly owned. It can get very confusing. Good luck with it, I hope you get paid.


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## buckwheat_la (Oct 11, 2009)

snomover;1529300 said:


> Long story short, looking for collection advice. Last year we were a sub for another company. They stopped paying after last storm and never finished paying. They owe us over 12k What would you do? I've never been in this position before.


I know some people are going to disagree with me, but I am all for going back to the contracts that you did as a sub, and informing the powers that be that the subs are not getting paid. Any contract would have to worry at that because if the company that they hired is not paying its subs, eventually it may affect service, and that is never good.


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## Antlerart06 (Feb 28, 2011)

In future they get 2-3k behind stop the work dont keep going and getting deeper in the hole
Fill a lien on them next time


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## nighthawk117 (Nov 29, 2008)

Continue to invoice them with the past due amount plus interest, sent certified mail. Track everything you do, file a lien on everything they own , try to report this to a credit bureau , hire a collection agency as a last resort. The continued effort on your own behalf will get you much further than our ridiculous justice system. There is a good chance you will not see the money, but continue with collections. A collection agency will harass them to the point that will really anger them, make sure you provide them with ALL there call numbers, both home, cells, business, relatives info. Good luck and don't back down !!


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## KBTConst (Oct 25, 2009)

buckwheat_la;1529775 said:


> I know some people are going to disagree with me, but I am all for going back to the contracts that you did as a sub, and informing the powers that be that the subs are not getting paid. Any contract would have to worry at that because if the company that they hired is not paying its subs, eventually it may affect service, and that is never good.


I agree 100% I used to work for a builder and we was building a house he didn't pay the lumber company and they sent a letter to the home owner stating that a lean was going to be placed on their property the next day the lumber company was payed because my boss didn't want to lose the job because they had other houses for him to build. So maybe it will work in this case the OP has nothing to lose at this point.


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## PushnSnow (Dec 2, 2012)

KBTConst;1529832 said:


> I agree 100% I used to work for a builder and we was building a house he didn't pay the lumber company and they sent a letter to the home owner stating that a lean was going to be placed on their property the next day the lumber company was payed because my boss didn't want to lose the job because they had other houses for him to build. So maybe it will work in this case the OP has nothing to lose at this point.


With that example, it would be the same as the Sub Plow contractor filing the lien on the properties he serviced for the contractor. That may be an option, and if that were to happen, the people that pay the contractor might apply the necessary pressure to get him to pay you. The down side is that I doubt the customer would ever want to do business with either of you again. Was this $12,0000 from one monthly billing cycle, or did you continue subbing to these guys while they were behind paying you? If you bill once a month and are Net 30, I could see them owing you 2 months easy enough, but once an account is past due by even a day, I'd stop providing service until it's paid.


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## snomover (Dec 31, 2010)

PushnSnow;1530541 said:


> With that example, it would be the same as the Sub Plow contractor filing the lien on the properties he serviced for the contractor. That may be an option, and if that were to happen, the people that pay the contractor might apply the necessary pressure to get him to pay you. The down side is that I doubt the customer would ever want to do business with either of you again. Was this $12,0000 from one monthly billing cycle, or did you continue subbing to these guys while they were behind paying you? If you bill once a month and are Net 30, I could see them owing you 2 months easy enough, but once an account is past due by even a day, I'd stop providing service until it's paid.


 They were a couple to a few weeks behind on the first couple payments, but I figured if I quit i'd get nothing because we were already owed, and it seemed worth the risk because they kept 3 of my trucks moving. Looks like I got burnt. and that 12k is 3 months payments.


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## PushnSnow (Dec 2, 2012)

snomover;1530545 said:


> They were a couple to a few weeks behind on the first couple payments, but I figured if I quit i'd get nothing because we were already owed, and it seemed worth the risk because they kept 3 of my trucks moving. Looks like I got burnt. and that 12k is 3 months payments.


I understand. I was in the same situation with an employer I had years ago. Month after month, he didn't have enough to cover me. He'd give me a little here and a little there to get by with. I stuck it out for several months hoping he'd catch me up. Over $6,000 behind when I finally had enough. Tried to sick the labor dept on him, but that got me nowhere, even though they ruled in my favor. After months of fighting it I finally gave up. I think I managed to get $1200 out of the 6k he owed. Never again. Past due, and you don't get anything from me.


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## snomover (Dec 31, 2010)

PushnSnow;1530553 said:


> I understand. I was in the same situation with an employer I had years ago. Month after month, he didn't have enough to cover me. He'd give me a little here and a little there to get by with. I stuck it out for several months hoping he'd catch me up. Over $6,000 behind when I finally had enough. Tried to sick the labor dept on him, but that got me nowhere, even though they ruled in my favor. After months of fighting it I finally gave up. I think I managed to get $1200 out of the 6k he owed. Never again. Past due, and you don't get anything from me.


I feel for ya. They kept stringing me along with partial payments, I did quit working at one point but, then again they came up with a little money so I continued. After the snow stopped falling the money stopped coming in. Really hurts when I basically worked all summer to pay for a big mistake. I still had to pay my guys. Sucks real bad! Never again......


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## 90plow (Dec 22, 2001)

Id say go with a collection agency at this point you know they arent going to pay. My fiance worked at an mri center she said they were on a first name basis with the agency guys they puy everyone in collections.


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## Earthscapes (Feb 2, 2001)

Get all your paperwork & proof in order and go see a lawyer. Don't wait as your pushing your time limit. 95% of the time they will settle out of court, because it costs them more to go to court. If they offer you a payoff, go no less than 10K. The lawyer will probably cost you 1K, but at least you will recoupe something. 
I had this problem last season with a property managament company. I was owed 27K going into May this yr, I settled for 25K & my lawyer fees were 1.5K. So yea I took a loss, but got paid within 3 months instead of draggin it along forever.


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## Mick76 (Aug 2, 2009)

Snomover... curious as who the company is? pm me would be best.....


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## leolkfrm (Mar 11, 2010)

word of mouth...tell people who they are and what they did


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## CT-TILEMAN (Jan 3, 2009)

I plow on a per storm basis, they have 10 days to pay me, after that they can shovel.........a great motivator is knowing you won't be by if any balance is 10 days past due from the bill.

If you let them get a ahead of you they will own you all season and screw you at the end.

Walk away before the hole is so big you can't get out without getting hurt bad.

I learned your better off not doing the work and not getting paid then doing the work and not getting paid.

Good Luck.........


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## csi.northcoast (Aug 7, 2010)

Have moose and rocco help them find their check book - caddyshack

Seriously get a good attorney, the will name everybody involved,the company the person who signed tyhe contract for the company, they may even name the place you plowed at (as a way to get someone attention)... are they still servicing the place you plowed at???

do not hesitate... its your money, finally tell us so no one gets burned again


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## hedhunter9 (Nov 15, 2008)

Years ago, I subcontracted for a small company, 
He got behind paying all his subs after a very heavy winter. 
He had underbid his seasonal and was losing money like a gambler.

I went to him before the season ended and told him I was putting leins on every property I plowed for him, which included his own house, as I had plowed it a couple times.

He paid me the 3k he owed me that week.

The other subs kept getting the run around.... Waiting for next months check, etc...
Will pay ya when we get into warm weather and start doing lawn care.. etc...

Well, 6 months later the guy declared bankruptcy....! 5 subs got nothing out of the guy.
He owed my nephew 5k... He got nothing.

Leins do work most times..

Bob


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## NICHOLS LANDSCA (Sep 15, 2007)

If he won't call or talk to you, you could send letters to all the customers stating an intent to file a lein. It's just a bluff though, atleast in MN you have waited too long. As someone said it doesn't matter that he INC'd he's personally responsible for anything prior.


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## TGreen (Dec 27, 2012)

Cash flow is the engine that drives businesses large and small. Delinquent accounts are the brakes which bring companies to a screeching halt. In recent years, the tenuous nature of the economy has pushed many companies to extend the time they will permit an account receivable to age prior to instituting formal collection efforts. Based on a recent survey of members of the Commercial Collection Agency Association of the Commercial Law League of America (CCAA), this "loosening" of payment requirements may be severely impacting on companies' cash flows and bottom lines. According to the survey results, the probability of collecting a delinquent account drops dramatically with the length of delinquency. For example, even after only three months, the probability of collecting a delinquent account drops to 73%. After six months, the probability of collecting drops to 57%. After one year, the chance of ever collecting on a past due account is a dismal 29%. The results of this survey clearly demonstrate the critical importance of taking positive action when an account receivable ages past its due date. Companies must take a hard line on past due receivables, and turn to professional help when their internal efforts do not prove successful. What can a company do, internally, to minimize and better control problem accounts?

DON'T ASSUME. While there are usually established credit practices in every industry, there are also differences. It is important that your customers know what your credit policy is in order to eliminate misunderstandings. Reiteration of that policy, when a payment is first overdue, is the first step in facilitating payment.

KNOW YOUR CUSTOMERS. In today's economy, no company should extend credit without ascertaining the customer's reliability. In the event, however, those records indicate irregular payments, that account should be kept under close scrutiny, with immediate follow-up even a week after a payment is delinquent.

KEEP CREDIT RECORDS CURRENT. Companies are not static enterprises. Changing markets and management directions can quickly alter the health and stability of a company. Keep abreast of trade reports on specific companies, especially those which are your current customers or potential customers.

REVIEW AND TIGHTEN YOUR COLLECTION PROCEDURES. Periodic review of collection policies and procedures is always beneficial. Unforeseen events can never be eliminated, but you minimize your company's chance of loss by rigid adherence to your policies.

DISCOURAGE EXTENDED PAYMENTS. Be very particular regarding which customers are permitted to use extended payments. Too many will not only endanger your company's cash flow, but also lead to undesirable precedents as well.

ACCEPT PARTIAL PAYMENTS ONLY WITH FINAL PAYMENT COMMITMENT. While partial payments may show "good faith," and part is better than none, the best practice is to acknowledge part payments but demand a commitment for the balance.

SHORTEN THE COLLECTION SCHEDULE. Shorten the period, after a customer is late with a payment, for continued extension of credit.

KEEP COMMUNICATION OPEN. Make sure you are getting through to the right person - the decision maker. If a visit to the customer is necessary, do it.

RESOLVE DISPUTED MATTERS QUICKLY. If your customer is using a dispute over quality of merchandise or service, price or delivery as the basis for non-payment, attempt to reach a mutually agreeable settlement promptly. If a customer is withholding a substantial payment over a minor dispute, insist that the undisputed portion be paid immediately. Your judgment will tell you when you have exhausted all the internal means at your company's disposal to negotiate a satisfactory payment. However, based on the survey quoted at the beginning of this article, if your efforts do not bring results in the first 60-90 days, then you should strongly consider seeking the help of a professional collection agency.

Enlisting the services of a commercial collection agency which is a member of the Commercial Collection Agency Association of the Commercial Law League of America is a good place to start. These agencies must all meet the following criteria:
•	Be licensed in all jurisdictions in which they do business. 
•	Maintain a bond in the minimum amount of $300,000 for the protection of the companies they serve. Many member agencies maintain a surety bond in the amount of $500,000 or more. 
•	Subscribe to a strict Code of Ethics designed to protect creditors as well as debtors. 
•	Be an established agency in business for five years or more. 
•	Provide timely status reports on client claims. 
•	Attend educational forums and meetings throughout the year which provide updates on the latest rules and regulations pertaining to the collection industry, as well as supply information on new techniques and methods to streamline and improve the collection process. 


Turning to a collection agency should not be "your last resort.". A professional agency, whether or not a member of the CCAA, will be better able to serve you the earlier they receive your claim. Most importantly, working early with a collection agency will help you realize the maximum dollar recovery on your past due accounts while safeguarding your on-going relationships with your customers.


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