Collecting from deadbeat customers

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MB43

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I'm sure that anybody who has a business has had to deal with dead beat customers. How do you deal with it? Collections agencies? Sue them? Both? Hire a couple of big guys to go out and "have a talk with them"?
 
Well, I've had two different place where we had to do that. The one is a small repir service. Generally it was the call of the owner, and he always tried talking to the guilty party first. After that, it was a decision based on how much was owed versus cost of filing a complaint in civil/small claims court. Factored in was the likelyhood of the offender to pay, and how much discomfort it would cause them in the community.

The second place was a small "buy here, pay here" car lot. If they fell behind more than two payments, we went and brought the car home.

I don't know if that helps, since the reality usually is you get stiffed, and thats how it ends.
 
Well, small claims court isn't an option as the amount is higher than the limit. I've been talking with them for a while and they keep promising to make good on their debt but haven't done it so far. Now the last 2 weeks or so I don't get any response from them at all.

I spoke with my attorney, he said that we'd have to sue them in Supreme Court, and it'd cost me quite a bit to do that. I've seen some places that say they'll handle collections, and I there's no fee unless they collect. But then their fee is like 30%. I wouldn't mind paying that if they could collect the whole amount owed... Anybody have any experience with that?
 
This is a topic that unfortunately IVe had to deal with plenty of times over the years. Different states have different laws as far as what you can do in attempting to collect a debt so this may not even be an option for you. This doesnt always work but it sure seems to get things moving along much faster in most cases. If the $ is owed by a commercial account when I file with the court I also file letters of attachment/lien on any and all corporate checking/banking accounts used by the company. If its a residential customer I file a "general property lien" which would cover not only dwellings but any and all other personal property ie boats, cars, etc, etc. People dont want liens on property because it totally screws their credit rating and also requires them to pay off the debt in order to sell any of the said property. It for sure hits them like a ton of bricks and almost always gets things resolved. Businesses want no part of their accounts being attached because it can end up pulling money unexpectedly out of any of their accounts leaving them bouncing checks to suppliers, vendors, and yes even payroll checks. These are things I wish I never had to resort to but somestimes Ive been left with no choice.
 
in some cases I look at it as a cheap way to never see that person again,sounds like you don't have that option,pay a lawyer to write and send them a registered letter to get them to $#it or get off the pot but check into attaching leins etc' first and do so if you can.be ready to go the long drawn out route or cut your losses and walk away,don't let it get to you,sometimes if you let something go something way better comes your way.Good Luck
 
I also wanted to mention that some states allow you to write off "old debt" (in Ohio its 9 months or older) and still attempt to collect on the debt. Check with your accountant and see because, especially now, every little bit helps.
 
Hire a hooker (male, female or transvestite is an option) and tell them to go visit his wife. Send his wife flowers that say some other girls name on them. Buy him a subscription for a gay mag and request they be sent unwrapped to his home.
No warnings or threats just do it.
At that level, "business" and "nice", do not belong in the same sentence.
Daryl
 
You could always make some bets with the bookies, on his behalf of course, and when time comes to pay.......well, he'll see how the grownups really play.
Daryl
 
In Colorado you can get a "Mechanics Lien" on thier house. Funny how fast they pay up when their 8% cards go up to 24% and and they can't sell their house or get more credit 'till you remove it. :)
 
I worke for my dad at his feed store. We had to go to a pay or no hay stand. People don't think that they had to pay for the feed for there horses so we stoped doing credit. Sad but thats the way it is in this economy. People will burn you with out a thought. Thay will burn you so they can pay there other bills.
 
LOL... Some interesting ideas there. But I'd prefer to keep it (mostly) professional. Plus the person who owes me is a she, not a he. ;-)

I've been looking into the mechanics lien, I don't think I can do that sort of thing here in NY. Plus the company (an LLC) probably doesn't own any property so there's really nothing I could put a lien on.
 
No, no, no, no! She got beat (several times) with the ugly stick. No way, no how!
 
mikelbeck said:
the company (an LLC) probably doesn't own any property so there's really nothing I could put a lien on.
Click to expand...

In that case for sure look into filing with a letter of attachment/lien on their company banking accounts. The letter they recieve will spell out whats going on and also inform them to be prepared to completely disclose any and all accounts to the court or they will also be subject to criminal prosecution. That letter from the court alone might scare the living hell out of them and get you a nice phone call with some real payment arrangements. Best of luck!
 
I own a septic co. and I always tell my customers in a joking way that I have a hell of a collection policy. If they dont pay I bring them back 150%. Then if they really dont pay I simple show up at there house in my pump truck and remind them of my policy. I usually get paid! Strong arm collections are not pretty but I've had to go that way as well. Good luck

Skullz
 
mikelbeck said:
I'm sure that anybody who has a business has had to deal with dead beat customers. How do you deal with it? Collections agencies? Sue them? Both? Hire a couple of big guys to go out and "have a talk with them"?
Click to expand...



Yup.. Biff & Rocko along with a baseball bat.
 
I live in a small,mostly Italian community. I dont dare not pay a bill.

Guido and Louigi come bust youse door and breaka youse face...
 
i tend to lean toward the write off. i'd love to have the cash, but owing that much less to the govt. is cool too. my grandma always said, "you catch more flies with sugar, than salt".
 
Have the lawyer write them a short letter of warning, giving them a grace period to pay the bill, with an explanation of the whirlwind they'll suffer if they don't pay.......Lawyers will generally not charge too much for this service (if you know them, that is).........After that, they can file for a judgment against the customer that will go on their credit report for the due balance plus legal expenses. Most customers will try to clear up the debt instead of facing the consequences. They won't be able to buy a house or car, or perhaps even get a credit card unless they clear up the debt.

In many states, the lawyer can file for a "mechanics lien" against the balance........it's placed on their property so that when it is sold, you get paid first. Noit very practical though if someone holds their property long term.

I've found that a letter from a law office is usually effective.
 
Get good counsel regarding the applicable laws in your state. The letter from the lawyer is good first approach. You may want to inform the female of what your recourses are if not paid in full (e.g. mechanics lein, report to credit bureaus). At this point it's not personal, it's pay up or face the consequences.
 
I've done a lot of collections. My two best tools: an old cop car that I bought. Visit them Friday afternoon, a lot of folks didn't like to have the old unmarked cop car in the driveway. They would run out of the house and meet me in the driveway with money in hand just to have me leave quicker!
The second tool was my motorcycle. Show up on Saturday morning about 9:00 wearing mirror shades and a leather jacket. Get them out of bed and they didn't like that either!
C
 
needsaresto said:
I live in a small,mostly Italian community. I dont dare not pay a bill.

Guido and Louigi come bust youse door and breaka youse face...
Click to expand...

Guido and Louigi :toothy7::toothy10::toothy10: I forgot about those two.
 
as far as i know, you can still get a mechanics lein in ny state. our shop has had to do it twice to non-payers... the second guy was able to eventually pay to get his car back, but his car got repoed before he could pick it up later in the day. almost felt bad for the guy, but he was an ***...
 
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