Collect Call:
From March 2005
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“In such cases, you’re going to want to hire an attorney to take it through to a judgment. After you get the judgment, then either the attorney or the collection agency can try to collect,” says Byers.
He and Hopp both recommend obtaining a written personal guarantee when contracting with a newly established business. “You should have somebody personally guarantee that debt, in a separate statement that is written by a lawyer,” says Byers.
He offers another piece of advice as well: “As a safety measure, photocopy one of your client’s checks every now and then and file it so that you have their bank account information. Then later on, if I have to try to collect, at least I have a starting point.”
Some businesses may wish to pursue delinquent debtors in small-claims court, as Sacramento graphic design firm Goodchap Design Communications has done. In small-claims cases, which are limited to a $5,000 maximum, litigants must appear in court without legal representation.
Kathy Goodchap, the company’s chief financial officer, says the court has not resolved her inability to collect from an elusive debtor.
Hallway Settlement
“The judge encouraged us to settle the case in the hallway, outside the courtroom,” says Goodchap, explaining that an attorney volunteering as an arbitrator stood by to assist in forging an agreement.
“The client agreed to pay us $100 per month. The attorney filled out a payment plan that became the new contract. We both signed it and filed it with the court.” The new agreement was of no help, however; payment failed to arrive on the due date, leaving Goodchap again holding the bag.
Continued...
He and Hopp both recommend obtaining a written personal guarantee when contracting with a newly established business. “You should have somebody personally guarantee that debt, in a separate statement that is written by a lawyer,” says Byers.
He offers another piece of advice as well: “As a safety measure, photocopy one of your client’s checks every now and then and file it so that you have their bank account information. Then later on, if I have to try to collect, at least I have a starting point.”
Some businesses may wish to pursue delinquent debtors in small-claims court, as Sacramento graphic design firm Goodchap Design Communications has done. In small-claims cases, which are limited to a $5,000 maximum, litigants must appear in court without legal representation.
Kathy Goodchap, the company’s chief financial officer, says the court has not resolved her inability to collect from an elusive debtor.
Hallway Settlement
“The judge encouraged us to settle the case in the hallway, outside the courtroom,” says Goodchap, explaining that an attorney volunteering as an arbitrator stood by to assist in forging an agreement.
“The client agreed to pay us $100 per month. The attorney filled out a payment plan that became the new contract. We both signed it and filed it with the court.” The new agreement was of no help, however; payment failed to arrive on the due date, leaving Goodchap again holding the bag.
Continued...
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