Collecting on a debt

I need some advice. I am not going to bad mouth a person who owes me a debt, I figure their actions have spoken for themselves....

I made ten pens quite a while ago for a person I considered somewhat of a friend.

http://familywoodworking.org/forums/showthread.php?t=1531&highlight=ten+pens

It has been a long time and I still have not been able to collect on his debt....(371.00) I have gotten several replies to both mine and the wifes emails to him asking that he please send the $$$.

I always get the same answer..."I know I owe it and I am gonna pay this Monday"...not sure which Monday he is referring to?...

My wife works at the courthouse and certainly knows the right people to contact to start collections....I really have hated to up to this point.

I can imagine him being in the "lending" business will not speak well for him when the County Civil processor shows up at his place of business to serve him papers as well as the business since the pens were done for him to give to his "preferred" clients.

A part of me hates to do that over just $371.00 (no interest either) the other part of me says "It's my money he has...go after him and make him feel like crud"


So...would you go the "Civil processor route" or,... email him on a weekly (Monday) basis and ask when the $$$ is coming or is that harassing him?

I've also got a couple others who haven't "Paid in full" for work done on their houses which is large enough I am going to turn that over to collections, but I'm interested in hearing what or how you would handle the pens problem?

Wife says I am too nice and it's time to do something

It's been 9 months ... he's accepted the goods ... he's acknowledged his debt ... I would give him one last document that states a time limit and what will happen if that time limit is passed. This informs him that further action will be taken and he had better pony up. It also shows you're serious and not a door mat. When the Nice Guy doesn't make it happen, you gotta let him know you're not afraid to call in Guido and Vinny.

Yo Steve, you want we should pay a visit to this guy and bring a baseball bat?

Well that really stinks Steve. So much for "friendship". I think I would send him a past due bill via registered mail. Yeah, it costs a few bucks, but not as much as a collection agency. Net 15 days - via certified check or postal money order only - with a note that interest will accrue from that date at an incredible percentage rate and a collection agent will become involved. If he doesn't respond, then have the collection agency go after him. He will most likely respond with his "Monday" routine and possibly indignation at your letter. Let him be indignant - he isn't a friend if he has pushed things this far. Oh, if he tries to negotiate a lower price, ignore him and stick to the original agreement.

FWIW,
Wes

jesse`s got it almost right......march your upset hinny down to his place of business and politly ask for payment.....don`t be put off.....i`m here for my money and if i leave with out it i won`t be friendly any longer...no threats, no ball bats.....if he doesn`t have it offer to accompany him on his lunch break to a pay-day loan store.....that ought to get some thoughts running through his little ol` pin-head....if it comes to the point that you`re asked to leave and HE threatens to call the law, then and only then, file a complaint....be sure to add interest and collection fees to the original complaint don`t add them after it`s been filed.

Its always hard when a 'friend' can't manage to pay a debt. I have a similar problem. My sitch is supposed to be resolved this weekend.

I agree with others that a hard line must be drawn no matter how painful. Remember, they created the situation, not you. Hopefully you can avoid small claims.

Jason Beam said:

It's been 9 months ... he's accepted the goods ... he's acknowledged his debt ... I would give him one last document that states a time limit and what will happen if that time limit is passed. This informs him that further action will be taken and he had better pony up. It also shows you're serious and not a door mat. When the Nice Guy doesn't make it happen, you gotta let him know you're not afraid to call in Guido and Vinny.

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I guess I kind of did that back in April with this email....

Name omitted

_______________________________________________________________
I have been more than fair waiting for my money from the pens that you ordered along with the pen boxes I bought per your request. I have called you and emailed you over this matter and nothing has arrived in my mailbox in regards to paying for the goods you have received months ago.

While I do appreciate the business, I am eager to receive payment in order that I can also pay my bills. As you know money has been tight in the construction business in Michigan, so it is not at my luxury to give out goods without payment.

Please pay before Friday or else I have no choice but to take the next step in the collection process.

Thank You,
Steven Ash


...and his acknowledgment....

__________________________________________________________________

I am sorry for the delay in getting back to you. I have been off for an extended period of time. You WILL have payment by Friday. I am so sorry that this has taken so long to get paid. I am paying for them out of my personal account. You will get a check in the mail from my LLC. account. I take full ownership for the non payment to date. I did not follow up Like I should have. I am embarrrassed by this and feel horrible that this was not paid. I will take care of this myself and not put this thru accounting. Please email me once you recieve payment

I've been a debt collector. An in-person confrontation can produce undesired results. I suggest an arms length business-like, but no nonsense approach. As suggested, send a certified letter with a deadline to pay. Include your costs of mailing, no matter how trivial it may seem to you. If he doesn't pay by the deadline, use your small claims court and file suit. He will lose and pay not only the original debt but your cost of filing. And it will be on his credit record for (if I recall correctly) seven years. Remind him of that in your demand letter. Make the letter straightforward, no wild threats or name calling. Let us know what happens.

Based on the message you sent in April, I'd say he's had more than ample warning. You promised to elevate the problem to a collection agency back then...I'd follow through with the promise. (OK, since he's a "friend", maybe one certified letter telling him it's going to collections in 5 days if you don't see the account paid in full before then.)

Steve,

It's a tough situation, but it's your money, time and frustration that need to be taken care of. I would also give him one last notice, registered mail with return receipt letting him know he has one week to pay the amount in full or you will begin legal proceedings to collect the debt and notify the other organizations of the problems you have had. Wait for the check to arrive, take it to one of his bank's branch and cash it. If it bounces, you have even more to use as leverage...talk to the bank manager about the check.

72 hours later, take out papers to collect if it is still unresolved.

One down, move on to the next. Your wife will probably appreciate cleaning up the debts but especially like seeing you less stressed about getting the run around by one(s) you trusted.

Best of luck.

I am not an attorney but these are my thoughts.

I think that the next step depends upon what paper trail you have. Do you have an order signed by him or unpaid bill signed by him? Do you have the emails that you sent to him and also his emails back to you. If you have the paperwork or emails it should be a "slam dunk" in small claims court. I do not know if Michigan has small claims court but that is a great thing for problems like this. No attorney required.

He has had plenty of time to pay so he has no intention of doing so without being forced to. Write that guy off as a friend as well as a business associate. There are plenty of good people out there to deal with.

I personally would not turn it over to a collection agency. You know what they charge. That is robbery in my opinion.

Small Claims court is a God Send! I have one right now that after repeated promises nothing. Long story and I will not go into the details on here.

But I am picking up the small claims form, filling it out, and I am mailing a Certified Letter with a copy of the form to the jerk. Basically a pay me now or I file this on Monday. It's your choice, you have been a jerk and now it's my turn!

I can't speak for your area, but if you have copies of his emails or whatever, he has no defense. Plus here, we can add on the collection costs which includes any court costs if you win.

Allen Bookout said:

Do you have the emails that you sent to him and also his emails back to you. If you have the paperwork or emails it should be a "slam dunk" in small claims court.

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Yes, I kept all emails and printed them out in case my (heaven forbid) computer crashed, I would have all the correspondence and his acknowledgement of debt owed.

The last email he sent to my wife, and she printed it off then brought it home, but basically he said in it to "go ahead and take me to court and get it one way or another...I just plain don't have it now"

I am thinking it is too bad HE don't have it, but it was done for his business and he is a partner, so the business and/or his partner may need to come up with it. I am sure he has not told his business partner he/they owe this debt.

I hate to pay anyone to collect on this debt since it is only $371.00 but if he has to pay for collections it would take the "sting" out of.

I have never had to do anything like this, so I don't know what are my costs or are his costs.

Seems a whole lot easier and less trouble if he'd just "man up"

Good luck Steve.

glenn bradley said:

I have a similar problem with a friend who also happens to be my boss. How's that for insult to injury.

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Glenn, I am not trying to preach to you here, or talk down to you in anyway, but rather want to pass on something I learned a long time ago...

When doing something for someone at work, don't do anything for PAY. Instead barter services or out and out give the item to them if it has minimum money value. When pay gets involved at the workplace, things tend to spiral out of control. Just something I learned over the years.

But take it with a grain of salt. I like where I work and the people I work with, but I don't hang out with them either. They aren't my friends...just people I work with. Every week they have a few cold ones after work, but I just get in my truck and get home. It sounds cold but for me work is work and home is home. I try to keep the two as separate as I can.

Steve...go the registered letter route...as outlined in previous posts. And...listen to your lady and go after any deadbeat accounts you have! They contracted with you for the work/materials...get FULL payments...a.s.a.p.!

For a small fee, my friend Vito will pay him a visit.
Take whatever's left of the guy to small claims court.

I agree that small claims court is the way to go. Since the pens were for the business of the debtor, name the business as well as the person who ordered. In the small claims complaint remember to ask for costs and for prejudgment interest and post judgment interest on the principal amount. While obtaining a judgment is no guarantee of getting your money, it will get a lot closer than you are now.

I would also suggest that you find a local lawyer that is familiar with your line of business and see what kind of retainer arrangement you can work out. It should not be that expensive, and would be a business expense. The cost for an attorney before there is a problem is less expensive than after there is a problem.

I sure hope this gets worked out Steve, that just plain sucks.

Lesson learned?

When you show up to deliver the product, you get paid, then you hand over the product, right?

We, in our liquor business, have only about 4 customers that get a monthly bill, all have been in business for 30+ years, all have been our customers for 30+ years, still it is only 30 days credit. At the end of the month, I show up with the invoice, if it is not paid the next day, I stop deliveries. Thankfully I've never had to do that, but all of my customers understand I WILL do it.

Getting "Friendship" and money/business get messed up together is often a recipe for a bumpy ride, at least, but I'm sure you are WELL aware of that.

Hope you get your money back without too much trouble.

Cheers!

Travis Johnson said:

Glenn, I am not trying to preach to you here, or talk down to you in anyway, but rather want to pass on something I learned a long time ago...

When doing something for someone at work, don't do anything for PAY. Instead barter services or out and out give the item to them if it has minimum money value. When pay gets involved at the workplace, things tend to spiral out of control. Just something I learned over the years.

But take it with a grain of salt. I like where I work and the people I work with, but I don't hang out with them either. They aren't my friends...just people I work with. Every week they have a few cold ones after work, but I just get in my truck and get home. It sounds cold but for me work is work and home is home. I try to keep the two as separate as I can.

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Even the barter route doesn't work all the time. I had a friend that needed a lot of welding on his car - needed to replace some badly rusted metal - so I spent most of a day doing the work for him. Had to take a bunch of the car apart to get to the rusted parts.

So a few months later, I call him and ask him to help me with some car work on my car - all I needed was some basic labor with stuff that was too heavy for me to do alone. Guy remembers the work I did (mentions it) and promises to be there on the designated Saturday. That Saturday morning I get a call - he's too tired to help me.

As you can imagine, I never did anything for him again. Some people have a sense of obligation - a sense of balancing the books between people - and some don't. When I encounter someone who doesn't have that ethic, I just don't do anything more for them.

Sue the guy.

Mike