How to collect from a debtor

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jmh

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#185586 28-Nov-2015 09:07

Hi

I run a small business which is my livelihood. My terms are payment up front before delivery, which has always worked. Anyway, the guy paid by cheque and the cheque bounced. I usually wait for the four day clearance but for some stupid reason I didn't on this occasion (kicking myself big time).

Anyway, I have phoned, emailed and texted him every week. I've had 7 promises of payment, none of which has happened. He is happy with the product and it has achieved his aim, so no question over quality. It comes to just over $400.

Any suggestions as to how I can this back? I threatened a debt collection agency last week and, again, he promised to pay, but hasn't.

Can anyone recommend a debt collector? It's not something I've had to do before. Other advice welcome.

Thanks

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683 posts

Ultimate Geek

#1436617 28-Nov-2015 09:13

Throw a brick through the prick's window

Or baseball bat his car.

scuwp

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#1436638 28-Nov-2015 09:35

Give him final written notice and a deadline. After that pass it to the debt collection agency or repossess the goods

Lazy is such an ugly word, I prefer to call it selective participation

Lias

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#1436651 28-Nov-2015 10:02

You accepted a cheque.. in 2015... realllly?!?

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SATTV

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#1436696 28-Nov-2015 10:36

Lias: You accepted a cheque.. in 2015... realllly?!?

I was in business for a few years and did not have one cheque bounce.

I did however have four people say they will pay by internet banking rather than paying by eftpos or credit card, I am not one to stand over them and watch them do it but they just did not pay me.
All were happy with my work but out come the stories of xxx was going to pay half or whatever.

Hopefully you got your client to sign terms and conditions before you started any work.
Hopefully in your T&C you have a clause that they pay interest and dept collector fee's.

Highlight this to the customer, send them a registered letter or one by courier with signature ( or even had deliver it ) giving them three days to clear the debt + ( any interest )

If that does not work, call them and say as this was not paid you are no placing the debt with a collection agency and go straight to the debt collector, I dont know any but there are several out there, some are better than others.

Hopefully they will pay up before it gets that far.

Unfortunatly you probably have spent more time trying to collect this debt already than you made on the job.

Best of luck.

John

I know enough to be dangerous

MadEngineer

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#1436719 28-Nov-2015 11:05

^

"Debt collection fees are recoverable" notices at place of sale agreement or bust.

You're not on Atlantis anymore, Duncan Idaho.

networkn

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#1436740 28-Nov-2015 11:16

Zippity: Throw a brick through the prick's window

Or baseball bat his car.

This is a silly thing to suggest even as a joke, as someone may not understand it's a joke. It adds fuel to the fire, and the person doing this would end up with serious issues, well in excess of the $400.

Geektastic

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#1436747 28-Nov-2015 11:21

I'm sure Baycorp can help.

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MadEngineer

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#1436749 28-Nov-2015 11:23

local debt collection agencies are better

You're not on Atlantis anymore, Duncan Idaho.

Rikkitic

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#1436783 28-Nov-2015 11:46

Debt collectors cost money. Along with other things, this is a psychological battle. People who write bad cheques sometimes start out with the intention to cheat, but often they are just fantasists who convince themselves that they will somehow magically be able to cover the cheque by the time it is cashed. Often they are also juggling debts, paying whichever one becomes the most urgent. You can try to raise your debt to the top of the pile by writing a stern, but not threatening letter, informing the debtor that if you have not received the payment on your account within three days, you will be coming with a few friends to repossess the item. See how the person reacts to that. It is important with someone like this to follow through on whatever action you say you will carry out. Actually show up at the person's door with some friends. Don't threaten, don't do anything illegal, just stand at the doorway with your friends and state in a neutral voice that you have come to collect your item. If that doesn't work tell the debtor that you are on the way to the police to report the person for theft since that is what taking an item and not paying for it is, just like shoplifting. Make it very clear that you will not stop harassing this person until the debt is paid or the item returned.

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timmmay

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#1436786 28-Nov-2015 11:51

After the number of warnings you've given them I'd send it to a debt collector now, and I'd add on the cost of collecting the debt. That gives them motivation to pay ASAP as fees add up. You should probably work out whether you can legally charge collection costs if you haven't got it in your terms.

networkn

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#1436787 28-Nov-2015 11:51

Rikkitic: Debt collectors cost money. Along with other things, this is a psychological battle. People who write bad cheques sometimes start out with the intention to cheat, but often they are just fantasists who convince themselves that they will somehow magically be able to cover the cheque by the time it is cashed. Often they are also juggling debts, paying whichever one becomes the most urgent. You can try to raise your debt to the top of the pile by writing a stern, but not threatening letter, informing the debtor that if you have not received the payment on your account within three days, you will be coming with a few friends to repossess the item. See how the person reacts to that. It is important with someone like this to follow through on whatever action you say you will carry out. Actually show up at the person's door with some friends. Don't threaten, don't do anything illegal, just stand at the doorway with your friends and state in a neutral voice that you have come to collect your item. If that doesn't work tell the debtor that you are on the way to the police to report the person for theft since that is what taking an item and not paying for it is, just like shoplifting. Make it very clear that you will not stop harassing this person until the debt is paid or the item returned.

It's critical for anyone following this advice, to understand you need to remove the emotion from it. If you don't, you could easily cross a line that sees YOU receiving police attention.

All that needs to happen for that to occur is for them to FEEL threatened even if you don't explicitly threaten them. Any friends that accompany you, need to clearly understand that and keep their mouths FIRMLY shut.

I wouldn't handle a matter like this, like that, but please be careful if you do choose to do it.

My advice, in your head accept you aren't getting the money back, and then hand it to a company who will chase it for you. If you get some money back, it's a pleasant bonus, if not, you have learned a valuable lesson about accepting non immediate forms of payment.

MadEngineer

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#1436801 28-Nov-2015 11:57

Indeed. I've seen a very good debt collector in action - and his methods were the opposite of heavy handed. Stern, but sounding like he's a good guy trying to help - because each stage of the collection recovery becomes more and more expensive for the debtor and the court will win in the end.

You're not on Atlantis anymore, Duncan Idaho.

Journeyman

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#1436825 28-Nov-2015 12:49

Hire the Mob.

jnimmo

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#1436826 28-Nov-2015 12:54

We use a service called iCollect which is basically a little database that generates an official letter on their letterhead, and works pretty well. Only a small number do we then refer on to Guardian or Baycorp etc.
I guess probably don't want to buy it though if everything is usually paid upfront

Kyanar

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#1436848 28-Nov-2015 13:52

Just a side note, repossession as people in this thread keep talking about may not be an option for you. There are very specific actions that must be taken, and agreements that need to be made to allow it. If you show up at his house with friends to repo it, all he has to do is say "please leave my property" and you must do so or face trespass charges, as you are not a repossession agent, and you do not have an agreement that allows repossession. Even if you did have such an agreement, you are legally required to provide a pre-possession notice, and take a copy of a repossession notice with you. Way more involved than rocking up with a few mates.

Issuing a cheque that bounces is in fact cheque fraud, which is a criminal offence. You could remind your customer of this.

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