unpaid invoice - what can i do?
so the situation is this:
I did some design/development work for a small startup company. I prepared a "Statement of Work" document that outlined the deliverables, schedule and cost which was agreed to by the client over email. I collected half of the money up front (as stated in the SOW) to begin work. I delivered the final products thus holding up my end of the deal. I then sent an invoice for the remainder of the money owed. When the invoice was 30 days past due, I made several attempts (phone calls and emails) to contact the appropriate person within the company to collect with no success. Several months later I had a friend more skilled in this area than me make calls on my behalf. He was able to speak to their accounts payable person who promised to send a check "on Friday" - I even sent them a postage paid envelope. Several of these conversations occured - no check. A few months after that, we made contact with them offering to reduce the debt by 25% if paid by 4/15, which they agreed to. Again, no check. Since then, we have been unable to get a hold of them.
Any advice on the best course of action to take? I do not have a signed contract or anything, just the SOW, but I am pretty sure that leagally, they are obligated to pay. PS, the web site I built is still accessible through their domain and they have had more work done on it. Obviously, I don't want it to get to the point of lawyers and court over $1600 but I do want my $$.
Collection agency? debt buy-out? Any other recourse?
At the very least, you've learned to get it in writing next time.
I'd say consult a lawyer and get the lawyer to write them a letter on their law firm stationary threatening to take them to court. This costs around $50-$100 I think, but might be worth it. A letter from a law firm might scare them enough to do something.
You could first threaten them to court by a persoanal letter. If that doesnt work then go to a lawyer. Thats all i can think of, is to keep threatening them.
Yup, threaten them with "further action", make sure you send it in writing.
Me fail English? Thats unpossible!
You could also take them to small-claims court, or register a lien against their business or some of their individual assets/property.
I'd send them another Past Due notice and make a phone call to whoever does their accounting. If you have no luck, call a collections attorney. You can find a great collections attorney who will do your work for free and get your money back for free. They will sue them for your money plus their charges.
In most cases however, just threatening to sue opens their eyes
Oh also, putting a lien against their assests or property is a last resourt scenario. You will only get you money back when they sell said propery/asset. Sueing is the best bet. Make sure you save all your documents as evidence.
July 21st, 2004, 03:48 PM
Might be a little late to chime in, but follow up with a Past due statement. Sometimes a single invoice gets shuffled into a pile of papers and lost. It happens.
$1500+ is a chunk of change, if you can afford to, write it off as a "Bad Account" under GAAP rules and take the loss. Basically it becomes a tax write off so the next $1500 you make would not be taxed.
Also, be sure to report them to the local better business organization. Also, see a lawyer and get a general contract drafted and then have the contract signed and even notorized. Notorized maybe overkill, but then the contract is as good as stone as there is an independant 3rd party confirming the contract. The Notory we used was USD 10 each time we used her services and $10 on a $1500 contract is chump change.
Why? Because Forms just look cooler in OS X...
Dutch, it's like German...but not!
July 22nd, 2004, 03:26 AM
Eh not much you can do, you cant take them to small claims court, your gonna have to fight the fact they can say you did it as charity! That will go a long way, secondly, no court will recodnize web agreements, well atleast none that i have been to, unless you 1.) have an email (with headers) 2.) have a save Chat conv. or other form of proveable conversation.
Sending a lawyer will not scare them because it is just a person, thats like DELL sending you a letter, its unsecure debt as they would call it.
You could however as the programmer, webmaster, designer, or other means, put a lean on the site. shut it down till its paid, thats why I make sure I HAVE CONTROL OF THE SERVER WHEN I DO WEB PROGRAMMING!
Unless you have a contract you have claim renigging as they call it, or any other means of busting out of the contract and not paying, thats why you just lean it, send another invoice, call up, or write it off.
Most of the time its better to write it off as a bad debt, call up once a month and then keep on going.
You loose more money battling it then its worth.
200$ is not worth 2000$ if you get my drift.
Court costs for small claims is usually 70$ - 500$ depending on the type of court and judge you have, and lawyers (if need be) will run you from 500$ to 1600$ which right now at minimum is 570$ which is right up there on loosing almost 37% of your income.
You as the copyrighter though, can however sue them for quite more since you own the work, but then you step on federal territory, and fcc regulations and da da da its all done over the web so your pratically screwed man.
As far as posessing personal property, that steps on the boundry of against the law, its unsecure debt, this means basically you cant do anything but sue them, even if its secure debt they most of the time dont claim property.
If you try to claim the website, reposess it they can claim it was a gift to somone, and then your really screwed because you CANNOT take a gift, this is why credit card companies dont take anything that is a gift.
Unless you have it in the contract, written, or over the web (digtally signed or proveable) you cant really do anything but close the site down!
July 27th, 2004, 12:35 PM
For further times, I suggest you send them part of the project first, then get them the rest done after they've fully payed it.
I had an issue with someone a while back. Collected 300 Euro deposit, delivered the first two bits of the project, then he never did, so I cancelled the project and stopped working on it.
Cheers, and good luck.
March 6th, 2009, 03:50 PM
If they never pay, can you write it off somewhere on your taxes?
March 6th, 2009, 03:53 PM
You do realize this this post is almost 5 years old, right?
Originally Posted by AdamCox9
March 6th, 2009, 03:57 PM
I have the same question and want to know if any tax credits can be applied for lost revenue from this.
March 10th, 2009, 09:58 AM
Small claims court may be the best way, even just threatening them with that may make them pay.
I too always ask for 50% upfront, then 25% upon agreed design and the final 25% when all work is complete before the site is uploaded.