Debt Collection

[nev25]

As an self employed electrical contractor i seem to be always chasing people for money.

Three time now Ive payed for the assistance of a Debt Collection company.

The latest one has got me stumped as to the integrity of the company I'm now using.

I decided to use a Victorian Collection company as I previously use a Sydney company and interstate company seeking info from a Victorian court seems to be a difficult task.

I did some work for a local nightclub the total bill come to $466
To cut a long story short refused to pay.

So I handed it over to a company that I hadn't used before.

Well the whole thing (So I'm being told) has been to court and Judgment was made in my favor.
But still no payment
I then forked out More money for the Sheriff to seize goods.
Apparently the owner has nothing in his name of value
So the Debt collection company now wants more money to issue an Oral Examination Summons where he is dragged into court and asked to explain why he wont pay and the judge will make arrangements to make him pay.
My problem is that I have already spent around $600 to get this far
So I am interested in hearing readers comments as to what they will do.

I do have to question the integrity of the Debt collection company.
Have they done all they have said they have done.
I cannot for the life of me see why a Business owner would not pay a mere $466 bill and risk getting a bad mark on there credit rating (which I am told has been given)
I'm told this bad mark will not do him any favors when he apples for credit from a wholesaler, supplier, bank etc
(Actually the collection company told me he wouldn't be ever able to get a loan)

Does anyone know if there is a procedure to check that the Credit company has done what they say they have
I spoke to the state ombudsman's office who suggested I contact Consumer affairs who said Theres not much they can do??

[journeyman Mick]

Nev,
never engaged a debt collection agency so I can't help you there. Maybe you need to rethink how you do jobs for new/dodgy clients. Perhaps a deposit when starting the job and a cheque waiting on the day you will finish with you not leaving the premises on job completion until the cheque is handed over. No cheque, no power. You might be better off using small claims court (if it exists where you are).

Mick

[Sebastiaan56]

Nev,

Funny you post this, Ive been hard at debt collecting for the last couple of weeks, unpleasant work but I finally got two recalcitrants to cough up yesterday.

I have this problem all the time. People think they can get lots of printing and not pay for it. I use a collection agency that is run by a friend and they do what they can. But if this jerk has no assets, you lose or they go broke you lose. It sucks. I wrote off over $20k last year, I hate it. Makes me sympathetic to sharia law, cut their hands off! When it comes to money I have no faith in humanity at all, pack of thieves the lot of them.

Better checks on potential account customers is my only answer and COD for anyone else that walks in through the door. We also take 50% deposit if we dont know the customer and they order more than $50 worth. Ticks a few off but Im not a charity. Im also adding 2.5% for AMEX and 1.5% for all credit cards now as well. And if these jerks cant recognise the cost of doing business and complain let them go elsewhere.

Some serial losers/thieves I send to my competition, but thats another story.

[MICKYG]

Nev

If you have spent $600 to get $466 it may time to write it off and put it down to experience, exercise more care when getting a new client by making substantial enquiry regarding payment( although the Privacy Act will be trotted out as soon as you attempt to make enquiry). Its been an age old problem since adam was a boy and I do not know of an answer.

The organisations who make claims of getting your money seem to have their hand deeeeep into your pocket and with questionable results for smaller amounts. I am astonished at the amount of people who go bankrupt and after a three or four year period seem to appear as large as life and fleece another group of people. I am wondering if the law is not designed to protect these types of people.

I know a brick layer who did a house for a builder and never got paid that was ten years ago and the builder is still ripping off his subcontractors.


Just a thought

Regards Mike

[madrat]

Hi Nev25,

I too, debt collect for the business I work for and it is so time consuming.
We do use a local debt collection agency for when we are at our wits end, however, we have been lucky enough that almost everytime the customer receives that 'little blue slip', that is when they pay up.

We have had one customer who kicked up such a stink when the time came to pay that he forgot that we dropped everything to help him out as a matter of urgency (to him!) .

We finally received payment, after a paper war, but needless to say, he is no longer a customer of ours (our choice).

There have been times though where we have had to cut our losses to avoid further court costs.

Especially in your case when you are spending more $$ to fight it than what the invoice was originally worth.

I agree with MickyG "I am astonished at the amount of people who go bankrupt and after a three or four year period seem to appear as large as life and fleece another group of people. I am wondering if the law is not designed to protect these types of people."

You can request they pay the debt collection associated costs, but if you can't get the original invoice amount after the judgement going in your favour, what's the chances of you getting these costs also?

We have definitely become very careful as to the customers we take on board. Not to say we won't ever get burnt again, but we try not to.

Good luck!

[manoftalent]

I dont use dept collectors ....only a couple of times have ppl "done a runner" on me, and both cases went to small claims court, both were successful, time consuming but hardly any cost to me, I stated my case before the judge myself ...simple and mostly effective.

[bitingmidge]

I used to use an agency which charged a success fee only (25%), that doesn't work once you start going to court unless the numbers are quite large.

This year we (the company I work for) finally bankrupted a bloke (his third time) as a matter of principal. It cost us $8,000 to do it. He had a court order to pay, didn't, and was in contempt of court, but the way the law works we'd have had to pay the costs of the contempt proceedings to have him jailed as well, so we just settled for bankruptcy.

It looks like nasty vengeance stuff, but many's the time I've seen these blokes let off the hook, only to screw some other poor innocent person.

I can't comment on your agency, but they are probably passing on real costs as a result of our whacky system, which is there to protect the bad guys really!

P

[Sturdee]

I feel for you with the problem in getting your money but:

Firstly, you are using the wrong debt collection agency. Thre are reputable agencies that only charge a fee upon collection. Prushka is one of them.

Secondly, paying good money after bad, and more than the debt itself, is crazy.

Thirdly, from what has happened it is clear that you'll never get your money so write it down to experience.

Fourthly, the law is designed to protect debtors from their creditors and give relief in payment of debts rather than for the benefit of creditors.

Fiftly, in the words of a very experienced and wellknown company liquidator " Anyone who lends unsecured money or does work without security for payment deserves to loose their money"

Finally it appears that he has set himself up in such a corporate structure that he can continue to do business without any problems and if ever queried about this debt no doubt would claim a counterclaim on the correctness of the work done. Hence he would not suffer at all.

Peter.

[Waldo]

For all new clients I take on it's 40% up front, residual on delivery of artwork. I once started a job for anew client about 2 years ago, he wanted new livery for his shop, in the process of talking with him he said he had people start the same job previously but they walked away.

I kept this in the back of my head. A little time passed and he wanted changes beyond what was quoted for at the quote price. So I walked away, better to lose $600 at the time than keep losing more money.

Debt collection for my 2¢ is pouring more money after more money, if it were me I'd walk away.

[Howdya do that]

I have only ever used a debt collector once (after the debtors dog tried to eat me).

To cut a long story short I wrote off the $700 debt after paying the collector $800

[Brickie]

Firstly, you are using the wrong debt collection agency. Thre are reputable agencies that only charge a fee upon collection. Prushka is one of them.

Prushka like all debt collecting agencies are duds, Ive used a few Prushka being one of them, and the only thing that has work successfully is a solicitor, more expensive, but it works.

[rod@plasterbrok]

Lodge a claim with vcat only costs $40 or so. no solicitors involved and the ruling is as binding as a magistrates order.

By doing this you have only spent $40 and a bit of time to reach the same result and conclusion.

Companies nor individuals can not be wound up for debts this small so unless he is prepared to pay to get rid of the judgement you cant do a thing.

He may need to get money down the track and have to clear the judgement to do so. Just sit tight and hopefully you will get it that way.

Another step is to leave it 3 or 4 years and have another go at collecting via the sherrif. His circumstances may have altered by then.

One way we avoid bad debts is to specifically negotiate the payment terms before a job starts often you can smell a rat during this process.

Cheers Rod

[MICKYG]

You could always invite the local bikie chapter to pay him a visit just to spell it out how it is.


Regards Mike

[joe greiner]

Even in the world's capital of litigation, it isn't much better. IIRC, our "mechanic's lien" law derives from English common law. I get the impression that Oz doesn't have such a provision. We always had to execute a "release of lien" to secure final payment.

Also IIRC, the cost of the sherriff's enforcement of a judgment is added to the judgment. Probably varies all over the lot, though.

Although honestly practised by some, our professional licensing boards frown upon up-front payments. This is for consumer protection against itinerant scoundrels, of which we have many.

It occurs to me that establishing an escrow account, funded by the customer, for the value of the project could provide protection for both parties. Extra rounds of pizzing matches perhaps, but might be worth the effort.

Joe

[ian]

Nev

Is it only me, but why don't you sign up as a Mastercard/Visa retailer?

zap the client's crdeit card at the end of the job, if it bounces make it safe but leave them in the dark


as I see it the only reason a business might not want to accept cards is that they're working for cash and cheating on their GST


ian