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Has anyone had to use a professional service to collect delinquent accounts? How or where should I look for this? I am located in central Jersey, though I don’t know that it really matters. Thanks,hungry and pissed off.
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Replies
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I have never used a collection service. I have found that if things get to that point bartering for something of value may be a way out for you. On a couple of different occasions I have had to take goods in trade in lieu of cash. The last time that this happened to me a local brewery owed us a substantial amount of money. After much hassle, I drove away with a truck load of their product and called it close enough! Good Luck.
*Dave you sober yet :)
*Never had to use a "collection service". In earlier days I had a "collection tool"; 25oz. Hart "California Framer" framing hammer. Never failed me.These days I get 50% down, balance due on completion/delivery, written into the contract. No money, no delivery. Hasn't failed me, either.Dano
*In the early days my collection service was a chain saw. It worked real good at really messing up the structural integrity of a just framed house and most times kept up the cash flow. BUT, In this litigious society I agree with Dano. have an extensive contract that covers your butt and get half, (or more), down, and the rest at delivery.Jack.
*Do you have a buddy who is a lawyer or know one? My sister is a lawyer and when I had a customer who owed me for a CAD drafting bill I just had her make a phone call on my behalf. The check was FedEx'd the next day. It's worth a try.
*Jack and Dano, I'm surprised that any client would fork over 50% before seeing any work. I wonder if you would if in their position? Where is their protection? Consumers are taught, or should be, not to pay up front but to pay percentages as the work progresses. There are too many scammers out there. Taking draws upon showing proof that the work is partially complete seems a safer system for both parties. There isn't a perfect method, if there was we wouldn't need collectors and court decisions.
*I thought 50% down was an industry norm, Ian. I don't lift a finger until I get that deposit. I find most of the sub-contractors I use from time to time expect a 50% deposit too. On large jobs, starting somewhere around $14,000- $15,000 (and up) I use a progress payment system. If the progress payment isn't forthcoming, work stops. Slainte, RJ.
*I just saw a Discovery channel show about a custom motorcycle builder. He had "Pay up $ Sucker" tatooed on the palm of his hand. That could help.
*Sgian, I'll have to plead ignorance on this one. Only been building furniture full time for less than a year now. For 26 years I worked for a large dept. store chain as a store modernization coordinator. In that time I hired hundreds of general and sub contractors for jobs between $1000.00 and $1,500,000.00 and never paid a dime until at least 20% of the work was complete. It was company policy, no money up front.Well, I learn something on this forum everyday. Thanks.
*Ian, In my time, in various work situations, I've come across all sorts of big company 'policies.' I worked at one point for a small furniture business that was commissioned by a company similar to the one you worked for, i.e., no money up front. Accounts payable quoted the line, "It's not our company policy to pay deposits," or something similar, to which my boss, the owner of our business said something like, "I'll mention that to your boss when I tell him why he won't be getting the new pieces for his office that he's ordered." The next days his deposit cheque arrived in the second post!! I take a similar line. 50% down, or no work. ;-) Slainte, RJ.
*Here's the thing about using collections agencies.You will only rereceivealf of what they collect. And that's not to say that they will be successful in collecting 100% of the bill. Often times they will let the debtor pay less than the full amount due.Now 50% of something is better than 100% nothing, but it still leaves you a tab bit angry.You can go to small claims court if the bill is less than about $5000.00 (varies by locality).Now the judge may side in your favor, then you'll get a judgemenjudgment amount of the outstanding balance, and if you ask for it in your petition you may recover court fees, and interest on the monies owed. However, just because you get a judgemenjudgment necessarily mean the defendant will whip out the cash. So you may win the legal battle but you may still have to wait a good long time before you see that money if at all.And 50% down is certainly the norm from what I've seen.Good Luck!
I FEEL FOR YOU DUCKI, MY ADVISE IS IN THE FUTURE ,DRAW UP A CONTRACT,GET MONEY UP FRONT, 50% IS STANDARD PRACTICE FOR NON COMMERCIAL WORK,GET A SIGNATURE ON ALL CHANGES, AND DRAWINGS. THIS WAY YOUER MATERIAL IS COVERD,AND REMEMBER PAPER AND SIGNATURES HOLD UP IN COURT. GOOD LUCK.
Woodshaver,
PLEASE stop using all caps. It is very hard to read!
Alan
Sorry Alan,English,and spelling,are my weak points.
Woodshaver,
No need to apologize. So long as I can understand what you write you'll get no grief from me. I was objecting only to your SHOUTING.
Alan
To answer your question, yes. I have used a collection agency. I prefer to sell the debt to the collection agency, essentially washing my hands of it. I loose money if I have to go to court or have to sit on the phone hounding someone for money that I'll probably never see anyway.
As was mentioned earlier, it is entirely acceptable to request 50% of the initial contracted amount up front. What you must remember is that what you are making is usually unique and has little or no value to anyone other than the person requesting it.
Expressions Fine Wood Working and Cabinetry..A division of Schefer Engineering Inc., Santa Rosa, Ca.
Edited 6/5/2002 2:23:06 AM ET by Cuttoff
Have you thought about contacting the "Soprano's"?
Ducki,
I may as well chime in too. Lots of folks are unhappy with the time and trouble of going to court, and lamenting that having a judgement in their hands doesn't necessarily mean that payment will be forthcoming. What most folks don't realize is that just having that judgement gives you a tremendous amount of power over your debtor.
Most states have in place a system whereby judgement holders can get their money. Most of these systems are very easy--you just have to know what you're doing. The court's jurisdiction and interest doesn't end with issuing a judgement; the mechanism and power of the courts are at the service of judgement creditors.
With a judgement you can seize your debtor's bank accounts, cars, home appliances, tools, shop equipment, and so on. In most states you can make your judgement debtor tell you where those assets are--and if they do not, they can be subject to arrest and jail! Again, all you need is to know how.
Immediately after getting the judgement--that very day--you should go to the court clerk and ask about enforcement of your judgement. Most court clerks are very nice and very helpful; especially if you explain who you are and why you're there. It is often (but not always) the court clerk that issues information subpoenas (to make the debtor tell you where their assets are) and the seizure warrants (with which you can grab those assets).
Of course you, personally, don't go and have your debtor's car towed away. The sheriff (usually) is the one that will seize property and then sell it at auction, giving you what's left after his fees (not generally more that a few dollars). There can be great satisfaction knowing that your judgement creditor's car was taken and that you have made him a pedestrian. If, for example, the car did not sell at the sheriff's auction for enough to cover your entire judgement amount--even if it's just a dollar short--you can nab even more of your debtor's asset (more satisfaction!) and can keep on grabbing assets until the entire judgement amount is satisfied.
Usually, however, just getting the information subpoena prods the debtor to pay up. The subpoena sends an unmistakable signal that you are going after the money you are owed and won't be put off any longer.
Again, not much time is involved: some few minutes spent talking to the court clerk and filling out some few forms can set in motion the process that will get you your money. The reason lots of people don't collect is only because they don't know how. Remember, with a judgement in hand all the enforcement powers of the court are at your disposal.
Alan
Cool!
We can bring archived discussions back to life.
Dano"Form and Function are One" - Frank L. Wright
Alan, I agree that you are at least legally correct. Try it sometime.Expressions Fine Wood Working and Cabinetry..A division of Schefer Engineering Inc., Santa Rosa, Ca.
Cutoff,
Ahem.... I have done it many, many times.
Alan
O.K. too tired to argue...Expressions Fine Wood Working and Cabinetry..A division of Schefer Engineering Inc., Santa Rosa, Ca.
Cutoff,
Arguing is what I do for a living.
Alan
No you don't !!!!Expressions Fine Wood Working and Cabinetry..A division of Schefer Engineering Inc., Santa Rosa, Ca.
Cutoff,
Yes I do.
Please don't make me reveal my secret identity. Besides, it's not really my fault: I had a big fight with my family and was looking to do something to shame them.
Alan
LOL... O.K... Expressions Fine Wood Working and Cabinetry..A division of Schefer Engineering Inc., Santa Rosa, Ca.
In rare occasions when there is no other choice, I've gone to them and usually they get results. It burns bridges and not all of them with the dead beat. The cost of those burned bridges need to be carefully considered.
We chose to go ahead as a warning that we were serious but the resulting fall out cost us a lot of customers. (not all of them were bad customers either). As it turns out, in retrospect, it would have been better to take the loss. Hindsight is 20/20
>> ... in retrospect, it would have been better to take the loss.
Maybe. You know now how many customers you lost because of it, but there's no way to know how many customers would have stiffed you if you had shown them they could get away with it.
Obviously I don't know all the details, but if customers A, B, and C walk off because you try to collect a legitimate debt from customer D, they sound like a pretty unattractive bunch to me.
I've gotta repeat,
with 20/20 hindsite we would have been money ahead to take the loss. A few good decent bill paying customers left because in construction stuff happens to evan good people and they were apalled at what they considered our heavy handed methods. Now that's not the case, but that's what they heard. No amount of explaining could convince them otherwise.
We now get a credit report on everyone we do business with and consider it money well spent. people with good credit will work to pay off their obligations and those with poor credit won't. You can't change a skunks stripe.
Sure, if you had taken the loss AND everything else stayed the same. But 20/20 hindsight only works on what actually happened.
I gotta repeat, :)
you have no way of knowing how many of your good, decent, bill-paying customers would have decided that paying you on time just didn't make good business sense anymore, and no way of knowing that it wouldn't have been enough of them to put you in a worse position than you're in now.
I'm not disputing your decision, Frenchy, I'm talking about what it knowable. You can't know what would have happened if you had decided the other way.
Fair enough,
the economy slowed down at the same time so perhaps our loss of business should factor that in more to the equation. I just remember going and talking to one of our former customers who left us. He wouldn't look me in the eye, stirred the dust with his toe and acted for all the world like I was the mafia. Left me with the most uncomfortable feeling I've ever had in decades of doing business. We had no issues with him, he paid his bills and did a good deal of business with us. He left because he was afraid that someday we'd feel that we had to put the "arm" on him.
Now after that I went and talked again to the bill collector involved to see if I misunderstood what transpired. Make no mistake, the guy owed the money, while he kinda disputed it,it wasn't at all in question. His arguements were basically "well you're makin' plenty so what I owe isn't important."
While looking for a solution one of his friends (that we lost ) indicated that he had some pretty severe personal obligations (That he never mentioned to us) and paying the bill really cut into not only his cash flow but his personal obligations. He had to go to a lot of his "friends" and put the arm on them to survive. That kinda gave me an answer why it wound up hurting us so much. One guy talks to another and the story gets changed and maybe enhanced, and suddenly a reputation we've worked for decades to earn is trashed. Our only defence is to talk to everyone and try to reearn their trust. So far it hasn't turned around.
The money involved wasn't in anyway the differance between profit and loss, we collected out of principle. The collector we used wanted to collect the full amount rather than some work out in order to get his full commision. If we had been in conversation, it would have been simple to develope a workout, but he was a master at avoiding us.
What we actually netted out of the deal amounted to less than 5% of our monthly decrease in revenue. How much of that is due to the changed business climate and how much can be directly attributed to collection is debateable. Just in retrospect we shouldn't have.........
The only thing that everyone left out of the discussion is a "mechanic's lien". You have the right to lien the property of the person that owes you money. If they sell or refinance the property, you will be paid as a second mortgage holder. It might take a while, but it's the law, and they can't get around it unless they file bankruptcy.
Len (Len's Custom Woodworking)
That would drastically depend on the nature of the work you did or do. Build a guy a custom desk and don't get paid, I doubt you'll have much luck with a mechanics lein. Build and install the kitchen cabinets, and you'll probably pull it off.
Don
You are probably right that you wouldn't necessarily get paid on a small job, but you do have the right to file the mechanic's lien. The law states "On any private project, the lien laws or rights apply".
I teach classes in "Contract Documents and Construction Law, and I've seen examples of mechanics who have won settlements as low as a few hundred dollars. Anything lower than that number, you're better off to file a claim in small claim's court.
Len (Len's Custom Woodworking)
When it comes to the courts you never know. I think it often just depends on the mood of the day. Around here though, as far as I know, to file a mechanics lien you have to have worked asat what at one time was called a mechanic. That would be plumbers, electricians, carpenters, masons, etc. A cabinet maker building someone a custom piece of furniture like a diningroom table I don't think would have anymore luck filing a mechanics lein then a doctor would for non payment of a bill. Now if you were building custom kitchen cabinets, then the mechanics lein could apply. In this situation we don't know the nature of the work performed.
Don
Mechanic's Lien laws in each state are different. Some require that after a lien is filed, the lienor (creditor) must file a complaint in court within a certain time frame, such as 90 days, or the lien is extinguished. Clouding title to real estate makes people (debtors) nervous; as to personal property, less so. Ws the piece permanently installed, so that the lien might attach to the title to real estate is an issue worth considering. Some states allow a lienor to hold the property until full payment is recieved (useful for an auto mechanic) and might be used if a custom piece hits the shop for a tweak or repair. Many small claims courts are business friendly, and do not require a lawyer.
Or, as a carpenter friend of mine used to do, you could consider showing up at the site with a crowbar and threaten to remove the trim, doors, sheetrock, etc., till payment is recieved. He did get paid this way, but this approach I would not recommend.
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