Neal,
I feel for you, I've been there, years ago. When I started
freelancing with Ruby and Rails and stopped contracting to larger
companies, I simply made the default case 'payment in advance',
especially for startups (they must deposit with me money I draw
against. I emphasize it's their money until I have done the work). I
have not required one or two ongoing businesses to make deposits, but
the largest outstanding total I've allowed has been $5,000, and that
with lots of history and trust built up. In years past I've been to
court several times (always as plaintiff), I've won, I've lost, I
hate it, I never want to go there again, so I will turn down work
without deposits to cover it if I think there's any significant
chance I will not get paid. ... Sorry for the rant, doesn't help
your current situation, but something to consider going forward.
You are right where I was those dozen years ago: too much to get it
all in Small Claims, and too small to hire a lawyer, who will cost
about as much as you are owed to take it through Superior Court. If
you don't have two separate contracts, it might be worse than you
imagine, the court might allow only one action against the client.
Though I'm not a lawyer, it seems like one action per contract is all
you can file.
Some considerations: if you are incorporated you can't do this, but
if not you could actually file in Superior Court yourself for the
full amount. There are great Nolo Press books on how to do that and
how to behave in court. The court should be understanding and give
you some leeway if you have done a certain amount of homework. In my
opinion the only two court routes that make sense are that and Small
Claims. Hiring an attorney will just eat up whatever you might get.
The one thing you could have an attorney do is write a serious letter
threatening legal action. If you have something to propose, such as
payments, that could be worth it. Whatever you agree on should be in writing.
Is the client incorporated? If so, and it's not an ongoing business,
he has little to lose by walking away, and you're SOL. If he's not,
then you might do what an attorney would first do: check if he has
any real estate in his name. If he does then you can file a lien
after you get a judgment by one of the two routes I mentioned,
eventually he'll pay, he can't sell the property without paying. If
he doesn't have real property, then all you could do with a court
judgment is harass him and maybe attach his wages. A fair amount of
work, but might get you paid eventually if you are a bulldog and
don't let it go.
Outside of court, why don't you ask him to sign a note formalizing
what he owes? It should include interest if possible and a due date
or payment schedule. If he doesn't want more work from you (and why
would you do it?) he's unlikely to sign it, though.
That's what occurs to me off the top of my head. Contact me directly
if you want any more free advice (guaranteed worth what you pay for it!).
Scott
scott (at) railsrescue (dot) com
At 02:37 AM 7/18/2010, you wrote:
hello.
my business partner and i (both operating as freelancers) completed,
between the two of us, about $19,000 of work for which we still
haven't received payment. our last invoices were sent for may of
this year (we worked under the assumption of payment for march,
april, may, and june). my outstanding balance is about $9,000, and
my business partner's is about $10,000. the non-paying client is a
personal friend of mine who is building an application that i truly
believe in, but he hasn't been able to secure funding for quite a while.
i would like to keep the business relationship as amicable as
possible while ensuring that my business partner and i are able to
collect on our debt.
has anyone else been in a situation like this? i am going to propose
a monthly payment plan to the client. that would make us both
comfortable enough to avoid a formal legal process, so long as the
payment plan is abided by. barring that, what should we do / what
have you done? the amount owed to us each independently is greater
than the $7,500 limit for CA small claims courts. is there a way i
can sue him for part of the debt so as to keep it in small claims
court and minimize my legal costs by representing myself? or do we
each need to file a formal lawsuit for the sum total of our
individual unpaid invoices and get a lawyer? each unpaid invoice
individually (there are three) is less than the $7,500 small claims
limit; can we file three small claims lawsuits for each invoice? the
time period for which we were not paid spans (mostly) from march to
may of this year.
i'd appreciate any insight; especially from experience. i really
don't want to sue this guy, but i'd be a lot more comfortable with a
formal judgment against him than with his vague promises to pay when
he secures funding.
anyone?
-neal
--
SD Ruby mailing list
[email protected]
<http://groups.google.com/group/sdruby>http://groups.google.com/group/sdruby
--
SD Ruby mailing list
[email protected]
http://groups.google.com/group/sdruby
