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Check out this collection situation

Discussion in 'Business Operations' started by gqnine44, Jun 25, 2006.

  1. gqnine44

    gqnine44 LawnSite Senior Member
    Posts: 501

    We picked up a new customer this year. He wanted every service we offered and wanted to everything to look great. He signed our service agreement and I was happy to have another premium client.

    He and his wife are never home. The last time I talked to him was in early May. He said he has only been home once since New Years. I had requested a deposit of $500 before we began the spring cleanup. He never sent it although he said it had been mailed twice. I wasnt too concerned since it was just a deposit and I wouldnt do the spring cleanup without it. He is now behind two months on regular mowing and upkeep. His current bill is around $1700.00. I have left messages and sent emails with no response. Now I start to get worried. So I started investigated the guy. It turns out he owes a lot of people a lot of money.

    He is being sued by his mortgage company and the house is in foreclosure. He has the house on the market (I had no idea it was for sale) for 1.75 million. The United States of America has a lien on his house for around $300k. I believe this caused his second mortgage company to drop their lien because they know their will be nothing left once the feds, state, county, and primary mortgage company is paid. He is also being sued by his business' landlord for unpaid rent. Land Rover is also suing him in small claims court. :dizzy:

    I have a signed agreement but what is that worth? I can put a lien on the house, but why? I can take him to small claims and get a judgment but that doesnt mean he has to pay it.

    Any suggestions on what to do?? Right now, my plan of action is to stop all work at his house (duh) and attempt to make contact with the guy and let him know that I know all his problems and try to arrange payment. If this fails I guess I will take him to small claims court and pray I get paid.

    This really sucks because I have a contract and everything. But I am so far down the priority list of creditors I have no chance of getting paid even with a lien.
  2. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Dude, plain and simple you are screwed but I still file a lien (that is IF the Sheriff hasn't already served the Foreclosure papers, if he has it's too late). No mater what you say to him or threaten him with if he isn't paying his car payment, house payment, taxes and business rent, he sure as heck ain't going to pay the lawn monkey.

    Forget him not paying the deposit, what puzzles me is I don't understand is if he claimed he mailed it "twice" why you did any work cause you knew when he said that he was lying and that should have told you right then he was a deadbeat. He used you to get his house ready for sale. Hope you learned a very important lesson in business.....LISTEN to clients when they talk because they say A LOT about themselves without ever realizing it.
  3. Coreyb

    Coreyb LawnSite Member
    Posts: 146

    if/when he files bancruptcy, any small claims judgement will get flushed with the rest of his debt. you're up the creek on this one. i always plan to get even, but then better judgement sets in. good luck.

    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    Any nice little landscaping trees or shrubs or boulders etc.
    I would and have taken my own action when all else is hopeless and there is no chance at payment.
    Good Luck!
  5. rider

    rider LawnSite Member
    from ohio
    Posts: 152

    if it ain't nailed down, take it
  6. ChadsLawn

    ChadsLawn LawnSite Bronze Member
    Posts: 1,110

    then that is stealing
  7. K.Carothers

    K.Carothers LawnSite Bronze Member
    Posts: 1,124

    Mt thoughts exactly!!!

  8. FLAhaulboy

    FLAhaulboy LawnSite Senior Member
    Posts: 852

    ouch! file the lien, he may win the lottery tomorrow :)
  9. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I have not read the whole thread so someone else may have pointed this out by now, but just in case:

    Anytime someone calls asking for everything your ad offers, watch out that's a BIG red flag!

    If your ad reads (for example): Grass cutting, core aeration, mulch, hedge trimming...
    And they call and ask for ALL of that, you don't have to bother with these folks:
    If they left a message, delete it and move along.
    If you're on the phone with them, thank them for their time and hang up.

    Like the other guy said, LISTEN to them... Now I like to say I give them one red flag for free, but with this one I usually don't.
    Still, the $500 that never got to my mailbox would've been the last clue I needed.
    Nowadays, I get nervous long before they even owe me... At least half the time I double-check their info someplace and make sure it comes up straight first. Doesn't matter, just a prefunctory check, nothing serious but if anything seems out of whack, I RUN!

    As for the rest, you allowed yourself to fall this far behind. I am sorry to hear this but I got skru'd out of $700 my first year and I learned my lesson to never do extensive work for someone without some kind of payola someplace.

    What I usually do with big jobs is I do maybe 1-2 hours or $100-some worth of work and leave a bill. Then I wait for the check before I go out again. No matter how you look at it, if they pay fast I can still do $400 worth of work in a month which adds out to around $4,000 / year and that is more than enough in lawn fees for most people. Meanwhile, if they don't pay, I'm out $100+ ...
    In your case, I would've never even got started until I had that $500 deposit.
    Yes, if someone says they've mailed me a deposit, then I wait until their check clears the bank brother.

    Write this one off for experience.

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