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Court or collections?

Discussion in 'Business Fundamentals' started by birddseedd, Dec 4, 2012.

  1. birddseedd

    birddseedd PlowSite Veteran
    Messages: 3,516

    a few customers owe me 100 - 300.

    is it worth the time and expense to take them to court? or just hand it off to a collection agency even tho ill only get part of the cash back.
     
  2. wondo

    wondo Senior Member
    Messages: 146

    At least with collections you can get some satisfaction knowing they will bother the hell out of the deadbeat customer.
     
  3. Wilnip

    Wilnip Senior Member
    Messages: 583

    I placed a few accounts with the local collection company. I will not place any more with them. I'm sure laws are different everywhere but we have to send a warning letter by registered mail telling them that if we do not receive payment within 10 days, we will file with the magistrate. Sometimes that's enough to get them to pay. We even had one deadbeat show up the day of the hearing and pay their bill.
     
  4. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    If you're not registered as a corporation of ANY kind,take them to small claims court.Small processing fee,no lawyer,it's cool,and because I always was prepared,I always won.Just the certified letter your client receives can scare them into paying you before the court appearance.
     
  5. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,407





    So whats that have to do with collecting from a non payer?
     
  6. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    If you're a corporation[I'm a subchapter S,so I can't be the plaintiff anymore],you can't bring action upon someone else in small claims court.Regular court yes,but that's only meant for SERIOUS money and usually lawyers get involved.
     
  7. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,407




    Is that state law or fed law?



    My business needs to collect $1000, and it is an LLC.
    I haven't gone to small claims yet. It'll be my first time so I'm not totally sure what to expect.
     
  8. Mr.Markus

    Mr.Markus PlowSite Fanatic
    Messages: 5,167

    I send them a renewal like I forgot they owed, then when it snows I don't show up. When they call I ask for my money.
     
  9. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    Well,not 100% sure,but it at least applies to NY.Best for you to simply drop a dime and call the clerk at your small claims court.By me you have to file in the town/city where your client resides,NOT always the same as where you actually did the work.
     
  10. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,407




    Lucky me its in the same county.


    Western states have counties that are bigger than eastern states, so it does help that usually we aren't working in multiple jurisdictions.
     
  11. KBTConst

    KBTConst Senior Member
    Messages: 426

    Send a past due invoice with a side note that states please pay past due balance to avoid legal action. This works for me 95% of the time the other 5% goes to small claims court.
     
  12. birddseedd

    birddseedd PlowSite Veteran
    Messages: 3,516

    ya. iv done it. these people arnt paying. one even straight up told me he isnt. i think ill file the paperwork next week

    just go to clerks office and ask for paperwork and apy a fee?
     
  13. RJ lindblom

    RJ lindblom Senior Member
    Messages: 346

    I believe it a state statute. As much as attorneys have a bad name, sometimes they can do you a lot of good. Even if they answer your questions, or take the case. With small claims actions it is often easy to handle it pro se or "do it yourself." Often the plaintiff can ask for the defendent to pay any fees associated with collecting the debt. Including filing fees, attorney fees, processing fees etc.

    Once the judge signs off on the judement you still have to go about collecting the money. Sometimes a court order is all it takes, other times it takes liens or garnishments.

    In many states it shoulnd't matter that you're an LLC trying to collect as far as the court system see's it.
     
  14. KBTConst

    KBTConst Senior Member
    Messages: 426




    Don't forget to apply the fee to their bill. or you could just plow their driveway full when it snows! Thumbs Up
     
  15. TGS Inc.

    TGS Inc. Senior Member
    from Detroit
    Messages: 568


    Small claims court - get a money judgement...Done (I wouldn't do it for the 100.00, but for 200+)
     
  16. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    Yup,just looked up Michigan law.Anybody can file,whether individual,partnership,or any kind of corporation.I like Michigan--you get reimbursed for any and all court costs,judgement fees,etc.You aren't entitled to UNGATZ in NY.Good luck Birdseed.
     
  17. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,407



    A local lawyer told me that he is able to represent in small claims but that our judges look at small claims as an avenue for do it yourselfers and DO NOT like to see lawyers in small claims.
    He said that in small claims here the judge is much more likely to rule in favor of the claimant as they are the defendant as long as there are no lawyers involved.
    Bring a lawyer with you in small claims to sue over a matter and the judge is likely to find a technicality to throw it out.
     
  18. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    That is basically correct,especially in towns where the judge himself is not a lawyer,just a lay judge who can be a farmer,contractor,or whatever and that type is great because usually they have simple common sense and can see through any BS coming out of the defendant's mouth.You do need a case though with all your paperwork in order,dates,etc.Like I said,I've always won when I was able to go to small claims,but on one case the deadbeat client beat me on collecting the debt because of a technicality.
     
  19. RJ lindblom

    RJ lindblom Senior Member
    Messages: 346

    Yup. That makes sense.

    Every state does it a bit differently. Around here, a magistrate (who has a law license) will hear small claims action, they also hear small matters like traffic tickets etc. Circuit court judges hear larger civil issues (divorces or claims of more then $12,000 and criminal cases.
     
  20. BossPlow2010

    BossPlow2010 PlowSite.com Addict
    Messages: 1,032

    36$ to sue someone
    Includes certified letter
    And a date to have it.
    You go into moderation and argue a little bit then the judge sees you if you don't settle it and its a pretty big hassle if it's only a few dollars.