Re: Seeking Legal help
I'd like to thank everyone for commenting on this issue. FYI... 100% are in favor of starting the invoicing right away...done. 75% in favor of calling lawyers in... 25% in favor of working it out, specially with chap 11 on the horizon Now on the accounting side, If I invoice them and they fail to pay, and if my accounting is on a 'Occuring Basis' (I am not sure if this is the right term, but its the non-cash way) and I show this amount as a revenue but not collected, then what.. Is the entire amount deducted from my revenue before tax? Which means I really recover 30% of the total bill...right? Oh...and since the community has been so nice to allow this thread to continue...perhaps just send your reply to me directly so this thread sort of dies out Thanks On Wed, 21 Nov 2001, Medi Montaseri wrote: HiI know this is not the lawyers hang-out, but it is seasoned contractor's hangout and as such I need some legal advice...May I? I did some work (about $25000 worth) for a customer and I'm having problem collecting. One big problem is that I don't have a formal signed hardcopy contract binding my customer to the work and cost. I however do have verbal, email communications, FTP logs, Web Access logs, hardcopy business projections, Witnesses and such showing that I'm not making this up. After months of promissing sweet equity, partnership, this and that, finally customer has asked me to invoice them and charge interest for the unpaid balance. At the same time customer is using the application I wrote for them. I however have a feeling that they are simply buying time and differing the problem. And they might even file chapter 11 as their marketing projection was not so correct. But I did my part. What can I do? Should I see a lawyer, and put out yet some more money towards something that could never materialize? Is there some kind of Small Business Arbitration Committee? I'm in Northern California, Bay area Thanks -- - Medi Montaseri [EMAIL PROTECTED] Unix Distributed Systems EngineerHTTP://www.CyberShell.com CyberShell Engineering -
RE: [OT] Re: Seeking Legal help
Sorry for continuing the OT thread. I just thought this might be useful... Gunther Birznieks [mailto:[EMAIL PROTECTED]] wrote: By the way, if you are really working for a bank and cashflow is an issue for you in 60 days you can also ask the bank what business banking services they offer. One popular service with small businesses who have large companies working for them is invoice factoring which allows you to sell your invoice (if your company passes a credit check) to the bank for something like 80% of the face value of the account and then when the bank collects the invoice you get the rest minus interest and commissions. Factoring invoices can be a wonderful thing. May I recommend this company: http://www.facteon.com/ You need: (a) to pass a UCC search clean, (b) a credit worthy customer, (c) a contract with your customer, (d) and your customer to agree that the invoice is valid. Then you can get a good chunk of the money up front and more on payment of the invoice by the customer. Your fee depends on how long it takes your customer to pay. If they never pay, you keep the up-front payment and they book it as a loss. It's unlikely that they would grant the same credit with a 1-man company though. And I think they don't like dealing with service businesses. It's usually more for dealing with suppliers with real inventory where the main thing that can go wrong with an invoice is a pricing dispute over a line item of widgets I suspect. From what I know, Factelon works with one man companies and service industries. It's more important that your customer be creditworthy than you, since your customer must agree that the invoice is valid for it to be factored. David
Re: Seeking Legal help
From experience in the dotcom world I can tell you this, its a hard balance to fight. The more you push and threaten the lower on the pile of bills you will go. If this company is going to file for Chapter 11 they have no incentive to pay you at all. In fact, I remember watching management purposefully pushing the more aggressive debtors to the bottom of the list knowing full well they would never get paid. Best strategy from my perspective is to offer them a better deal. Take say $15k and write it off to a bad debt. They are much more likely to respond to a nice guy offer of 'I know things are tough, lets make a deal' then 'I will get my lawyer to yell at you at which point you will ignore me until you go out of business'. Debt collection is nasty when the players are not solvent. John- On Wednesday, November 21, 2001, at 03:21 PM, Robert Landrum wrote: Contact a lawyer. Then tell the client that you have contacted a lawyer. Put this in writing and sign it. Be specific and let them know what it is exactly that you want, and that if they do not comply, you'll be forced to enlist the service of a lawyer and file suit. Most of the time, this will be enough to get them to pay... Nobody want's a legal battle, least of all a small business. If they fail to pay, you have two options. Bite the bullet and move on or sue them. I am not a lawyer, but this is the process that my friend went through when he did about $20,000 worth of work for a client that was more than 180 days delinquent. After court costs and lawyer fees, etc., he walked away with $8,000. Not great, but better than nothing. Rob -- Only two things are infinite: The universe, and human stupidity. And I'm not sure about the former. --Albert Einstein
Re: [OT] Re: Seeking Legal help
* On 2001-11-22 at 10:37, Dave Rolsky [EMAIL PROTECTED] excited the electrons to say: On Wed, 21 Nov 2001, Matt Sergeant wrote: Maybe they weighlayed your invoice. Or don't have the money just yet but ^^^??? You folks may have invented the language but its still spelled waylayed! Um, no, it's spelt waylaid. :-) -- #kenP-)} Ken Coar, Sanagendamgagwedweinini http://Golux.Com/coar/ Author, developer, opinionist http://Apache-Server.Com/ All right everyone! Step away from the glowing hamburger!
Re: [OT] Re: Seeking Legal help
On Thu, 22 Nov 2001, Rodent of Unusual Size wrote: Um, no, it's spelt waylaid. :-) As you and everybody else has pointed out (mostly in private email). I was so eager and excited to give Matt some shit that I somehow incorporated part of his mistake. Oh well, that's what I get for teasing. -dave /*== www.urth.org We await the New Sun ==*/
Re: [OT] Re: Seeking Legal help
Matt Sergeant wrote: Step three: Once you've given them 90 days after date of invoice, get a solicitor (not a barrister) to draft a threatening letter. It'll cost you about $100. I'm afraid you'll have to give them another 30 days at this point. Step four: Get a lawyer. Sue. $25,000 is not to be sniffed at. What many small companies and one man operations dont realise is that debt collecting is an art. Also, some large companies (large banks in particular) have a policy of 'If you want to do business with us, we take 60 days to pay. It's all about keeping the cashflow on their side. I did some work for a certain Linux distributor in the UK recently and they took 100 days to pay after much harrasment. If you're small you have to be tough - put the geek aside and become that vicious old lady that is usually hired to badger late payers. Since you're also UK based, a good line you might want to try is I've already paid the VAT on this invoice. I'd like to know is whether I should write you off as a bad debt so I can claim the VAT back. - assuming you're VAT registered that is. ~mark
Re: [OT] Re: Seeking Legal help
At 01:34 AM 11/23/2001, Mark Maunder wrote: Matt Sergeant wrote: Step three: Once you've given them 90 days after date of invoice, get a solicitor (not a barrister) to draft a threatening letter. It'll cost you about $100. I'm afraid you'll have to give them another 30 days at this point. Step four: Get a lawyer. Sue. $25,000 is not to be sniffed at. What many small companies and one man operations dont realise is that debt collecting is an art. Also, some large companies (large banks in particular) have a policy of 'If you want to do business with us, we take 60 days to pay. It's all about keeping the cashflow on their side. It depends on the company, I think most take a long time to pay the first time because it's the first time you are being entered into their computer systems, contracts get signed off completely etc.. Of the large companies (banks included) we work with this is normally the case (a 60-100 day to get paid the first time), but subsequent times are usually quite easy for us as most of our large customers repeat back to us and we are already in their system for getting paid by their accounts payable department. Of course, there are exceptions to the rules, but I don't see large companies just arbitrarily trying to pull a longer cycle. At the least, they do usually have to wait for the accounts payable cycle and cutting an out of cycle check is a pain in the ass, but that comes sooner than 60 days. I think 60 days etc is reasonable if you are on a 1M-2M contract, but if your contract is a few hundred K over a year, it hardly will make that much of a collective cash flow dent to warrant it being worth their policy. By the way, if you are really working for a bank and cashflow is an issue for you in 60 days you can also ask the bank what business banking services they offer. One popular service with small businesses who have large companies working for them is invoice factoring which allows you to sell your invoice (if your company passes a credit check) to the bank for something like 80% of the face value of the account and then when the bank collects the invoice you get the rest minus interest and commissions. It's unlikely that they would grant the same credit with a 1-man company though. And I think they don't like dealing with service businesses. It's usually more for dealing with suppliers with real inventory where the main thing that can go wrong with an invoice is a pricing dispute over a line item of widgets I suspect. The other thing is that if you do a contract, build in billing cycles. 20-30% up front on a fixed fee contract is not unreasonable. Of course, you may need to commence work anyway before getting it if they are a large company that is having trouble getting you in their system, but that is the risk. But in any case, you can soon usually figure out whether they are going ot be paying your schedule or not. If you are just a normal hours-based contractor, then it's a bit more like getting a salary and so I think it is much harder to argue to be paid up front. I did some work for a certain Linux distributor in the UK recently and they took 100 days to pay after much harrasment. If you're small you have to be tough - put the geek aside and become that vicious old lady that is usually hired to badger late payers. The same all over the world. ;) Later, Gunther
[OT] Re: Seeking Legal help
At 03:21 PM 11/21/01 -0800, Medi Montaseri wrote: I did some work (about $25000 worth) for a customer and I'm having problem collecting. This has been beaten to death on the list, but... (and I'm not a lawyer, but I drink beer with one), If you think they are going Chapter 11, then you may want to try to bargain down to some amount to get something, so you are not on their list of creditors. When they do file, if that's the case, they have to notify the court of their creditors and then the court is suppose to notify you. You must then file a proof of claim, and get in line with everyone else. If you think they might fail to list you as a creditor when they file, contact the court every few weeks and check if they have already filed, and file your proof of claim. Then at least you might get a penny on the dollar... $25K is a bad number, in that it's too big for small claims court, and it's too little to get much help from lawyers in a law suit, I'd guess. Ask them if they want to pay partially in hardware and you might get a good idea of their direction ;). Good luck, Bill Moseley mailto:[EMAIL PROTECTED]
[OT] Re: Seeking Legal help
On Wed, 21 Nov 2001, Medi Montaseri wrote: HiI know this is not the lawyers hang-out, but it is seasoned contractor's hangout and as such I need some legal advice...May I? I did some work (about $25000 worth) for a customer and I'm having problem collecting. One big problem is that I don't have a formal signed hardcopy contract binding my customer to the work and cost. I however do have verbal, email communications, FTP logs, Web Access logs, hardcopy business projections, Witnesses and such showing that I'm not making this up. After months of promissing sweet equity, partnership, this and that, finally customer has asked me to invoice them and charge interest for the unpaid balance. At the same time customer is using the application I wrote for them. I however have a feeling that they are simply buying time and differing the problem. And they might even file chapter 11 as their marketing projection was not so correct. But I did my part. What can I do? Should I see a lawyer, and put out yet some more money towards something that could never materialize? Well I'm from the UK, but I imagine most things apply. Firstly, I think you have enough to confirm a contract, assuming you have something stating that a contract will be forthcoming. However laws on this can vary greatly. Step one: Invoice. Now. If you haven't invoiced and you're arguing they haven't paid up yet, you have no leg to stand on. Step two: talk to these people! That's the most important thing to do. Maybe they weighlayed your invoice. Or don't have the money just yet but expect it soon. Step three: Once you've given them 90 days after date of invoice, get a solicitor (not a barrister) to draft a threatening letter. It'll cost you about $100. I'm afraid you'll have to give them another 30 days at this point. Step four: Get a lawyer. Sue. $25,000 is not to be sniffed at. -- Matt/ /||** Founder and CTO ** ** http://axkit.com/ ** //||** AxKit.com Ltd ** ** XML Application Serving ** // ||** http://axkit.org ** ** XSLT, XPathScript, XSP ** // \\| // ** mod_perl news and resources: http://take23.org ** \\// //\\ // \\
Re: [OT] Re: Seeking Legal help
On Wed, 21 Nov 2001, Matt Sergeant wrote: Maybe they weighlayed your invoice. Or don't have the money just yet but ^^^??? You folks may have invented the language but its still spelled waylayed! Step three: Once you've given them 90 days after date of invoice, get a solicitor (not a barrister) to draft a threatening letter. It'll cost you about $100. I'm afraid you'll have to give them another 30 days at this point. We just have lawyers. There's no distinction between solicitors and barristers. Actually, I'd start by seeing a lawyer since you want this as expedited as possible. A lawyer might tell you that you only have to wait 30 days after the invoice (or something like that). You never know. It won't cost all that much to simply make an appointment and talk to a lawyer for an hour or so (probably $100-200) and it'll be probably be worth it to talk to something with contract law experience in your state. -dave /*== www.urth.org We await the New Sun ==*/
Re: Seeking Legal help
At 3:21 PM -0800 11/21/01, Medi Montaseri wrote: HiI know this is not the lawyers hang-out, but it is seasoned contractor's hangout and as such I need some legal advice...May I? I did some work (about $25000 worth) for a customer and I'm having problem collecting. One big problem is that I don't have a formal signed hardcopy contract binding my customer to the work and cost. I however do have verbal, email communications, FTP logs, Web Access logs, hardcopy business projections, Witnesses and such showing that I'm not making this up. After months of promissing sweet equity, partnership, this and that, finally customer has asked me to invoice them and charge interest for the unpaid balance. At the same time customer is using the application I wrote for them. I however have a feeling that they are simply buying time and differing the problem. And they might even file chapter 11 as their marketing projection was not so correct. But I did my part. What can I do? Contact a lawyer. Then tell the client that you have contacted a lawyer. Put this in writing and sign it. Be specific and let them know what it is exactly that you want, and that if they do not comply, you'll be forced to enlist the service of a lawyer and file suit. Most of the time, this will be enough to get them to pay... Nobody want's a legal battle, least of all a small business. If they fail to pay, you have two options. Bite the bullet and move on or sue them. I am not a lawyer, but this is the process that my friend went through when he did about $20,000 worth of work for a client that was more than 180 days delinquent. After court costs and lawyer fees, etc., he walked away with $8,000. Not great, but better than nothing. Rob -- Only two things are infinite: The universe, and human stupidity. And I'm not sure about the former. --Albert Einstein
Re: Seeking Legal help
On Wed, Nov 21, 2001 at 03:21:06PM -0800, Medi Montaseri wrote: [...] After months of promissing sweet equity, partnership, this and that, finally customer has asked me to invoice them and charge interest for the unpaid balance. At the same time customer is using the application I wrote for them. I however have a feeling that they are simply buying time and differing the problem. And they might even file chapter 11 as their marketing projection was not so correct. But I did my part. [...] Eek. The chapter 11 part really means you have no time to spare. See a lawyer yesterday. --- Michael Bacarella [EMAIL PROTECTED] Technical Staff / System Development, New York Connect.Net, Ltd.
Re: Seeking Legal help
Invoice immediatley. When you send it, tell the client you are sending it, and that you could really use the money since this is how you pay the bills. Call the client back in a few days to see if they got it. If they haven't then offer to fax it to him. If they have it ask them how long it will take, because you really need the money. Offer to contact the accounting department so the client does not need to be bothered. If this does not work then get a lawyer. But when you do this be prepared to wait a much longer time. best, -Rob - Original Message - From: Robert Landrum [EMAIL PROTECTED] To: Medi Montaseri [EMAIL PROTECTED]; [EMAIL PROTECTED] Sent: Wednesday, November 21, 2001 3:21 PM Subject: Re: Seeking Legal help At 3:21 PM -0800 11/21/01, Medi Montaseri wrote: HiI know this is not the lawyers hang-out, but it is seasoned contractor's hangout and as such I need some legal advice...May I? I did some work (about $25000 worth) for a customer and I'm having problem collecting. One big problem is that I don't have a formal signed hardcopy contract binding my customer to the work and cost. I however do have verbal, email communications, FTP logs, Web Access logs, hardcopy business projections, Witnesses and such showing that I'm not making this up. After months of promissing sweet equity, partnership, this and that, finally customer has asked me to invoice them and charge interest for the unpaid balance. At the same time customer is using the application I wrote for them. I however have a feeling that they are simply buying time and differing the problem. And they might even file chapter 11 as their marketing projection was not so correct. But I did my part. What can I do? Contact a lawyer. Then tell the client that you have contacted a lawyer. Put this in writing and sign it. Be specific and let them know what it is exactly that you want, and that if they do not comply, you'll be forced to enlist the service of a lawyer and file suit. Most of the time, this will be enough to get them to pay... Nobody want's a legal battle, least of all a small business. If they fail to pay, you have two options. Bite the bullet and move on or sue them. I am not a lawyer, but this is the process that my friend went through when he did about $20,000 worth of work for a client that was more than 180 days delinquent. After court costs and lawyer fees, etc., he walked away with $8,000. Not great, but better than nothing. Rob -- Only two things are infinite: The universe, and human stupidity. And I'm not sure about the former. --Albert Einstein
Re: Seeking Legal help
At 06:38 PM 11/21/01, Michael Bacarella wrote: On Wed, Nov 21, 2001 at 03:21:06PM -0800, Medi Montaseri wrote: After months of promissing sweet equity, partnership, this and that, finally customer has asked me to invoice them and charge interest for the unpaid balance. At the same time customer is using the application I wrote for them. I however have a feeling that they are simply buying time and differing the problem. And they might even file chapter 11 as their marketing projection was not so correct. But I did my part. Eek. The chapter 11 part really means you have no time to spare. See a lawyer yesterday. Seconded. Once they file Chapter 11, unsecured debtors (read: you) are basically SOL. You can't collect, you can't even *ask*. I just went through this with a client that I've been chasing over a couple thousand dollars for a year or so. I waited too long, they filed for Chapter 11, and now there's effectively no possibility of ever collecting. Live and learn. cheers, Todd
