Collecting money owed

I worked on a contract last year for 3 months and didn't get paid. It was part time so not a huge amount of money, but I got sick after that contract and net result - no income for close to 6 months so this has hit me hard. I have positively geared properties so I have paid quite a bit of my own bills just from passive income this financial year. My grocery spend has dropped to < $50 a week from necessity and the stress has probably been a big contributor to me getting sick so badly for so long.

How do other small business folks go with collecting debts? The other party is doing his best to ignore me completely. I have a court order to pay I got a few days ago I have forwarded to him, but just being court ordered to pay doesn't make someone open their wallet.

This process is very poorly documented and seems to need a lawyer to negotiate. Any tips about how do you go about wrestling court-ordered money owing from another company? Are there any actual penalties to be afraid of from not paying such an order?

 

Depends on the amount of debt. Cheapest is Enforcement proceedings. Examination Notice to assess assets and if they don't respond then the next step is examination in Court to ascertain assets. Then when you see what assets you can get warrants of redirection for 3rd party payers or seizure orders.

If a company you can go statutory demand route and then winding up. More costly though.

 

Small enough debt to go through small claims court - conversely, small enough debt that it should be no hassle to pay given its been 6 months now. I would have been fine had I not got sick, and just got another job. Its the getting sick that did it and now I'm stuck with a bunch of bills I haven't been able to pay on time (have arranged payment plans for all of them, so no earth shattering financial issues, just extremely annoying as I've never had to do this before - and I run a company so I have separate pots of money so it makes it all a bit more complex)

Same employer owes a much larger sum to another contractor, who is also going through the legal process at the moment. I wonder how much of the asset seizing process we can share ...

 

Do you have a court order? And is it a company that owes you money?

If so speak to a lawyer about a statutory demand. Company is presumed insolvent if it cannot pay its debts.

 

OMG I just got a response via text "I thought everything had been paid?". I've had lots of this kind of text. Have processed the invoices, my bookkeeper is going to pay those, I'll sort that out etc etc

Sometimes I wish I was joking with this saga. I would be a lot happier if at some point there was an explanation, or an offer of part payment.

This also makes me think about income protection insurance, but I'm at a loss as to how that works, especially in a situation like this where it is *late* pay not *lost* pay.

 

The bank/solicitor/everyone is prodding me to settle early so I've been stepping up the nagging about this debt, since I'm dipping into the dire emergency fund to complete this sale. Other solicitor told me 42 days and now it has been moved to 'now'.

 

IPI is for inability to work after X weeks/months whereas you may consider 'factoring' where you sell your bills to the debt collector for X% but you get very quick payment.

 

I've done a budget and I need at best case about $200 a week above my passive income to live off (although I usually draw minimum $300 a week, which is my rent). So I can survive some months between pays. I'm gearing up to semi-retire at the end of 2018 as its kind of obvious I'm pretty close even now but I regularly get advice to take out IPI. It just doesn't seem to suit someone who is top-heavy with passive income.

 

Other party completely missed the court action. He didn't even read any of my emails with invoices that had extra interest and fees added to the bottom, nor the latest email that had a court order attached to it.

He paid the outstanding invoices last night 6 months late and I said please pay the interest too. He said he wanted to settle now without negativity and I can take him to court if I like, which is pretty much absolute proof of how he hasn't been reading my emails/letters.

Since the interest is actually court ordered, and I am so annoyed at it being 6 months late with no explanation, I am going to be a pedantic ******* and chase the outstanding $400 or so in fees and interest. The other unpaid party has an entire legal firm so my $400 in fees/interest is just going to pale against the other party's hourly legal fees.

The other unpaid party seems to still be financially secure. They offered me a job.

 

Got a call from the insurance guy, seems when you have an annually calculated income as I do, you can nominate an amount of income to cover and a minimum unpaid period. Its for sickness and injury only, not for inability to find work or employers who don't pay. If it doesn't turn out to be prohibitively expensive I think I really need this, especially given I have 4 properties now ...

 

Good luck RumpledElf

 

Just ran with a debt collector over the last month.
negotiated a sum between client and I, and both agreed.

I should have gone thru VCAT for full amount owed but could not be bothered as only lost out 1k + Debt collectors fee approx 1k

 

I have had to chase small debts three times.
Twice, and this was years ago when we just were starting out, it was for our company - Depreciator. Two accountants ordered Dep Schedules for their clients and said they would pay for them. They didn't. And they resisted all reasonable entreaties over many months to cough up. It was only a few thousand dollars owed by each of them, but it annoyed me.
I went to the office of the first accountant and told the receptionist that I was there to collect payment for an outstanding bill. I explained everything to her and she disappeared out the back. She returned and told me the person I needed to see wasn't in but they would call me. I said, 'They won't call me. So I'm just going to sit here in reception for the day and wait. So it will be you, me, and any of your clients who come in the door.' The receptionist disappeared again and came back with a cheque.
At the next business, the receptionist was out at lunch. I could see who I presumed to be the bloke who had been avoiding us in his office. I walked in and sat in the chair across the desk from him. He looked up and asked who I was. I slid the unpaid invoice across the desk and said, 'You know that saying about how the squeaky wheel gets the grease? That squeaky wheel is sitting in your chair and not leaving.' He actually laughed and wrote a cheque. The said he would give us more work. I told him I wasn't interested and gave him a competitor's number.
The very first time I had to chase a bill it was for some graphic design work my wife had done - a book cover. For a socialist publisher, of all people. They had strung payment out forever. Again, it wasn't a huge amount, but again I was annoyed. This time I thought we should make a family outing of it. So there was me, my wife, and two toddlers who were going through a particularly boisterous stage. They were a tougher nut to crack than the accountants and threatened to call the police. I said, 'You'd better tell them they'll need a couple of baby seats in their car.'
Then I told them that while they called the police, I would call A Current Affair. I told them they would love the idea of a socialist publisher ripping off contractors. A cheque arrived pretty quickly.

When somebody owes someone money, they usually owe money to lots of other people, too. The tactic is to get to the front of the queue.

Scott

 

haha nice one @Depreciator

we have this one scumbag in the punjabi community in perth who has been around for around 30 years. in that time he has ripped off well over 10 people of a lot of money, in the 7 figures and would start by becoming super close friends with them, in particular recent migrants.

needless to say he tried it on withe my dad too, stiffing him on a deal to import some products. the only way I got the money back was literally sitting in a meeting with him, my dad and his son and telling him "uncle, i dont want to be rude here but if we don't have the money by tomorrow I'm taking your watch, your computer, maybe even your chair and I might take your son's watch too cos it looks nice. and don't give me any ******** because I'll do it in front of all your friends too so they know what a f##head you are".

needless to say he paid the next day, it was also comical because we don't swear in front of my parents at all and using the f word to an elder and in front of my dad wouldve usually been a huge no no. this was an uncle who up until then had been pretty much family and both families were very close for a number of years.

my dad originally didn't want me to get involved until I threatened to send someone in to rough the idiot up if he hadn't paid by a certain date and I wasn't allowed to speak to him. he knew what a loose cannon I was at the time so went with the meeting option.

there are legalities and then there are practicalities...

 

ouch, sorry to hear.

in hindsight what could you have done differently in terms of the drafting and mechanics of the vendor finance deal to protect your interest? might be some good learnings here for people reading.

did you have an extensive agreement drawn up with various provisions in there in case default occurred?

 

sorry to hear, hope it works out. Is there a charge against the business and the ability for you to take over in the event of a default? we usually have clauses to that effect in some capacity with all our invoice financiers etc

 

It would appear that you ran the business a bit better than him.

I would be doing that in a heartbeat.