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Unpaid Bill
updated: Aug 17, 2012, 10:29 AM

By Edhat Subscriber

Any advice on dealing with a issue with a client not paying their bill? Long story short, I started a business after I couldn't find a job during the Great Recession and one of my first client's has only paid a fraction of what they owe me. They have a solid reputation in town and I don't know what to do at this point.

I could report them to their professional association, try asking for payment again, stand outside their office with a sign or just give up. Other than telling everyone and their dog online about them I am at a loss as to how to handle this with them. I feel stupid, cheated and and like I broke my back for a total con- artist who has their client's fooled on what a "great" person they are when they treat others like this.

- Worst thing here was that they were referred to me by Edhat readers when I was looking for help :(

Comments in order of when they were received | (reverse order)

COMMENT 309506	2012-08-17 10:35 AM
Talk to them sincerely, see if they can make a payment plan (if they are having financial issues)...and if not, hand it over to a collections agency. You'll only get a portion of what owed, but it's going to hurt their credit, and give you less stress.
COMMENT 309509	2012-08-17 10:38 AM
My advice would be to ask them again, but perhaps mentioning that you will have to report them/out them/send to collections if they don't start to pay (payment plans are a great idea, 506!). That way they know you are serious & aren't willing to just forget about their obligation to you. Course, now I'm super curious who it is...
COMMENT 309510	2012-08-17 10:38 AM
If talking doesn't work, go to Small claims court - NOLO press book how to do it yourself, and talk to the small claims court advisor so you too can earn a worthless slip of legal paper, if the party has no attachable assets and still refuses to pay. But it does become a public judgement against them.
COMMENT 309512	2012-08-17 10:39 AM
You can send them to Collections. I know that these companys take a % but depending on how much they owe you it's worth it. Plus this goes on their Credit Report! You can at least threaten them with this. But make sure you dont back down, otherwise they will spread word that your a pushover. Good luck!
COMMENT 309515	2012-08-17 10:40 AM
Lots of these out there - I have collected by going to the office with the bill and waiting - telling everyone that comes in that I have not been paid. I guess my business question is - do you think he will have more business in the future for your company? My other question is - is the amount worth chasing - at times in business you need to weigh out the amount of headaches that this client is generating and walk away - We also run a small local business and get a credit card number before we start any work - period - total amount due upon completion - Company policy -
SHOREBIRD	2012-08-17 10:46 AM
They are already on the Michael Jacksom payment plan. He was famous for stiffing people.
DILLYDALLY	2012-08-17 10:48 AM
Good advice here. If the amount is worth more of your time, or you just cant let go, then pursue it. Try again, explain that the amount of money is not trivial to you and ask why they have they not been able to pay. Maybe a solution can be found (like payment plans). If the discussion does not satisfy you then let them know it is going to collections. Major kudos for starting a business and relying on yourself in hard times. I started my business in 2010 and can relate.
COMMENT 309519	2012-08-17 10:48 AM
It's probably best to ask them about a payment plan. If you send them to collections you will get maybe .10 on the dollar of what you are owed and then the collections agency makes a ton and usually adds on extras. If they don't pay you might be more financially better off to write it off as a tax loss and then tell them you can no longer do business with them.
COMMENT 309524	2012-08-17 10:53 AM
We have dealt with this situation several times in small claims court. Eventually you get a judgment which you can then take to the Sheriff. We have had the Sheriff walk into a business and take the cash out of their register, or into their bank and take cash out of their account if you know where they bank. They will also repossess assets, but this is complicated and expensive for you. Document everything, send certified letters with return receipts for proof in court. It's fairly easy, actually. We have had clients settle once a court date is set and they see we're serious about it.
MESARATS	2012-08-17 10:55 AM
Depending on the amount perhaps Small Claims Court?
D8VANILLA	2012-08-17 11:08 AM
@512 - There is a legal process before sending anyone to collections. be aware. ~~~~~~~~~~~ @524 - Good advice and sounds like you have gone through the legal steps to get your money owed. ~~~ Has the OP told us how much money are we talking about here??? The courts usually has a packet that will tell you exactly what you need to do before filing a small claims, unless they owe you more than the max allowed in small claims, then its Superior Court. So, how much we talkin about here???? ~~~~~~
COMMENT 309547	2012-08-17 11:23 AM
Head on down to Bedrock Building Supplies and see their "counter of shame" for all the bad checks they've received. Best plan, insist on payment at time of services rendered.
COMMENT 309557	2012-08-17 11:39 AM
I agree with the good advice you have already received. If they don't agree to a payment plan and the amount is worth pursuing you should. Also let them know you are reporting them to the BBB and will post online regarding their lack of business ethics. Maybe you will save some other honest businessperson the headache of dealing with them.
COMMENT 309568	2012-08-17 11:55 AM
Sad but true, some people just don't care nowadays. No matter what type of pressure you put on them it doesn't help.
COMMENT 309569	2012-08-17 11:56 AM
I have a small business and have had this problem. I am persistent. I email, fax, snail mail and call until they just pay me to get rid of me. I agree with others that by naming this business you may save some of us other small business the same fate as you.
COMMENT 309576	2012-08-17 12:05 PM
perhaps a whispered offer to reverse their lips unless the account is paid in full...
COMMENT 309585	2012-08-17 12:16 PM
Call the D.A. and see what they say. I'm sure they will point you in the right direction.
COMMENT 309601	2012-08-17 12:54 PM
I agree with 526. First, send them a certified letter asking they pay in full within a two week period. Small claims requires this.
COMMENT 309620	2012-08-17 01:24 PM
Also a business owner here. Agree with talking to them earnestly but don't waste time/money on a collections service. If they don't pay and you feel you are legitimately owed the money (sounds like the case) file a small claims action against them and let the judge sort it out. The SC court also offers free mediation services you can try before presenting the case before the judge.
COMMENT 309644	2012-08-17 02:23 PM
I like 569's approach.... call 'em, email 'em, snail mail 'em, call 'em at 2 am, 7 am and during dinner. Make a pest of yourself and if after a few weeks of that promise you'll post wanted posters throughout their neighbourhood. Collections and Small Claims may not get you any kind of return but this will get you satisfaction. As for future business.... who cares! This client is a dead beat payer!!
COMMENT 309653	2012-08-17 02:34 PM
If they don't pay by October, let us know...this list is also to protect each other...but give them one last chance.
COMMENT 309683	2012-08-17 03:36 PM
Do you have a written contract? If not, go to them and have them sign an IOU with a payment plan clearly specified in writing. If they do not pay, then you have a case for the courts! I went through Small Claims Court and found it to be very easy. It's just a simple form and then the court will first try mediation, which worked for us. The cost is about $50 and you can sue up to $6,000 (I think). If they lose the case, the court is allowed to garnish their wages to pay you and it will be on their public record.
COMMENT 309713	2012-08-17 05:00 PM
Please do us all a favor and post their name so we don't get stuck in the same situation.
COMMENT 309812	2012-08-18 07:35 AM
Out them if no response however, be careful with your wording. A gal was embezzling from our office and when I discovered it, I expected the doctor to call the police and instead he just fired her. She's still out there probably damaging other doctors offices. (Last name starts w a C ends with a z.)
COMMENT 309828	2012-08-18 08:22 AM
You didn't state: type of business, the amount, and what process you have used so far. We send out statement of account letters which lists the dates, amounts, and the age of the delinquent account. Call the person who does accounts payable to discuss the delinquency and a payment plan. Over time, those letters change from statement of facts, to becoming demand for payment. In 27 years of business we've only had to write off $125. This situation teaches you to choose clients wisely. You can request 50% up front in the future so you know that at least costs are covered.
FLICKA	2012-08-18 08:43 AM
Years ago a friend was in the business of selling hay; he always said up-front he wanted pay on delivery. A wealthy Montecito man let him stack a couple tons in the barn loft then said he'd pay later. My friend unloaded all the hay back on his truck and told the guy never to call him again.
COMMENT 309854	2012-08-18 09:33 AM
If you let the bill go without a regular, documented request for payment for four years (depending on the type of service the statute of limitations will expire. You will not be barred from continuing to ask for payment, but you will be barred from seeking legal action for payment of the debt. It was an excellent suggestion to try small claims court. If you receive a judgment it validates the debt for a longer period of time and the judgment can be renewed. Depending on the amount of the debt and whether it is a commercial or personal obligation a reputable collection agency is an alternative, even if you have an uncollectible small claims judgment. Collection agencies are barred from small claims court and must use Superior Court. Because of this they will not file legal actions on your behalf for debts that are small, heavily contested or unlikely to be collected - they have to pay all the court costs and the attorney fees up front.
COMMENT 309962	2012-08-18 03:18 PM
DillyDally, the government is responsible for successfull businesses, the president told us so the other day. So I guess if one's business is not successful it means the government did not give us enough help. This person needs to go to the government either to get financial help for the money they cannot collect from this client or perhaps get a "stimulous payment" to make up for the loss. GM got billions in taxpayers monies and now the government tells us taxpayers we will lose 35 billion in financial stimulus funds given to GM. Thank goodness for government stimulation funds and all that help. I don't know how any of us can survive without it.
COMMENT 309965	2012-08-18 03:26 PM
Don't know where you're getting that $35bn number, 962. http://gmauthority.com/blog/2012/04/gm-bailout-numbers/ Here is a nice resource from April. With $23bn repaid out of $49bn total, that leaves $26bn, which are owned in the form of shares. Anyways, you have an agenda. Not sure you'll have any reason to believe any numbers that disagree with that agenda.
COMMENT 310473	2012-08-20 02:26 PM
Go to small claims court. I used to have a small business, and I went there numerous times, and I never lost a case!
COMMENT 310544	2012-08-20 05:07 PM
@ 309962 The President did not say that ... you have knowingly told a falsehood.

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