Debt collection (recovering funds owed to me)

[SlinkyMike]

I have a customer who has paid a 50% security deposit on a piece of software he wanted built.

I have a signed quotation and I have provided him with a statement of work. I have completed the work and released the source code satisfying the requirements contained in the aforementioned documents.

There is now some dispute over the work that has been completed and he is refusing to pay the remainder of the signed quotation.

I want to hand this account over for collection.

Does anyone have any experiences they would like to share or could anyone recommend a way for me to proceed with this?

Thanks.

 

[Aghori]

Get a few of your tough-looking relatives/friends and go to his office. Sometimes intimidation is all these thugs listen to.

 

[SlinkyMike]

Get a few of your tough-looking relatives/friends and go to his office. Sometimes intimidation is all these thugs listen to.

Thanks but this is my business not The Sopranos.

 

[Frikkenator]

You're probably not going to get the rest, but just go to a debt collection agency and hand it over to them. Once this is done do not speak to the client again, let them take care of it.

 

[SlinkyMike]

You're probably not going to get the rest, but just go to a debt collection agency and hand it over to them. Once this is done do not speak to the client again, let them take care of it.

I suspect you may be right.

I am very near where you are in my thinking on the topic, I feel there is an issue of principle that leads me to want to hand it over for collection.

Do you perhaps know what would happen should the matter become defended?

I would not like to initiate a course of events that would leave me unable to avoid going to court. Financially that would probably not be viable.

 

[MKFrost]

Not sure what amount is involved, guess its more than whats allowed by the small claims court, but if not then why not go that route?

Its relatively simple and you will not run up a large legal bill so it will be worth it to try and get your payment through them. Think it will also go faster than debt collection. The debt collection agencies work on a commission and fees and they may just 'eat' a large chunk of what they recover, if ever. Also, they will only put as much effort into it as they will be getting paid so depending on the amount their actions might amount to little more than a threatening letter or two.

Also consider the fact that the person might laugh off the debt collection agencies but might not laugh off a summons to appear in the small claims court.

 

[Aghori]

Thanks but this is my business not The Sopranos.

If you want I can ask a few of the fellow forumites eg. marine1 and the gang to show the guy who owes you money the error of his ways?

 

[MickZA]

I have a signed quotation and I have provided him with a statement of work. I have completed the work and released the source code satisfying the requirements contained in the aforementioned documents.

There is now some dispute over the work that has been completed and he is refusing to pay the remainder of the signed quotation.

Bad idea to release the source code before final payment, best to limit software usability via a trial period clause - x days or a pre-determined date.

That said, there's often a difference of opinion regarding what was contracted for. Is the client being unreasonable in their expectations or just not interested in paying?

 

[Frikkenator]

I suspect you may be right.

I am very near where you are in my thinking on the topic, I feel there is an issue of principle that leads me to want to hand it over for collection.

Do you perhaps know what would happen should the matter become defended?

I would not like to initiate a course of events that would leave me unable to avoid going to court. Financially that would probably not be viable.

Yea it usually is a case of principle more than anything else. Speak to a debt collection agency about how it would work and what the costs will be. Remember they will have a hard time taking you to court, so it's up to you whether it goes to court or not.

 

[SlinkyMike]

Not sure what amount is involved, guess its more than whats allowed by the small claims court, but if not then why not go that route?

You guess right

If you want I can ask a few of the fellow forumites eg. marine1 and the gang to show the guy who owes you money the error of his ways?

Again, thanks but I'd rather be professional about things.

Bad idea to release the source code before final payment, best to limit software usability via a trial period clause - x days or a pre-determined date.

That said, there's often a difference of opinion regarding what was contracted for. Is the client being unreasonable in their expectations or just not interested in paying?

I actually released the code in response to his refusal to pay. I figure I have nothing to lose, it puts me firmly in the right and if he wants to run business through unsupported software then he is even dumber than he looks.

I'd rather not go into too much detail on a public forum but basically he disappeared for several weeks then pops up saying he wants x,y and z and won't pay until it is done.

The account has been dead on my books for weeks and I have indicated that until the account is settled I will not undertake any further development as this amounts to extending credit on and already bad account (the work was completed more than 30 days ago.)

There is no matter of opinion here BTW.

There is a signed quotation and a subsequent statement of work. Were there some differences in understanding or opinion he should not have paid the deposit thus initiating development on the basis of these documents.

 

[nthdimension]

If it is under the maximum for small claims then that is your least financially risky option. For small claims you'll only pay the cost of a registered letter and the delivery of the summons. It does require waiting in line though, to get your summons and on the day you go to court. On the other hand if you're confident of the contract a lawyer will work too. Sending a letter demanding payment will cost you a few hundred. Hopefully his lawyer will advise that he just pay.

 

[Nicodeamus]

A refusal to pay is already a sign of insolvency, the best is to directly apply to sequestrate him (skip the BS that lawyers tell you about going to court first). That is the only one that worked for me (although I pulled out a few times after I saw that I would end up putting a guy and his wife on the streets).

 

[yebocan]

I have a customer who has paid a 50% security deposit on a piece of software he wanted built.

I have a signed quotation and I have provided him with a statement of work. I have completed the work and released the source code satisfying the requirements contained in the aforementioned documents.

There is now some dispute over the work that has been completed and he is refusing to pay the remainder of the signed quotation.

I want to hand this account over for collection.

Does anyone have any experiences they would like to share or could anyone recommend a way for me to proceed with this?

Thanks.

I have an uncle Ernie...that does all my "dispute resolutions" for me....he is rather cost effective, and so far 100% track record.

 

[SlinkyMike]

If it is under the maximum for small claims then that is your least financially risky option. For small claims you'll only pay the cost of a registered letter and the delivery of the summons. It does require waiting in line though, to get your summons and on the day you go to court. On the other hand if you're confident of the contract a lawyer will work too. Sending a letter demanding payment will cost you a few hundred. Hopefully his lawyer will advise that he just pay.

It is over the R5000 (I believe) limit for SCC.

A refusal to pay is already a sign of insolvency, the best is to directly apply to sequestrate him (skip the BS that lawyers tell you about going to court first). That is the only one that worked for me (although I pulled out a few times after I saw that I would end up putting a guy and his wife on the streets).

This sequestration - would you mind clueing me in a bit please? BTW: this guy has the money he's just a tool.

 

[MKFrost]

It is over the R5000 (I believe) limit for SCC.

Limit is R12,000 I think

 

[HavocXphere]

I have a signed quotation

If you work on a contract basis then signing an actual contract would be a good plan. Signed quotation will probably stick too in court but its less than ideal.

A refusal to pay is already a sign of insolvency, the best is to directly apply to sequestrate him

eh no. He isn't refusing to pay he is disputing the work done...