Non paying customer just got served

Discussion in 'Business Operations' started by deltascapes, Sep 6, 2007.

  1. deltascapes

    deltascapes LawnSite Member
    Posts: 123

    After a landscape job that was finished in MAY, I turned it over to my lawyer (that I landscaped and maintain). This customer has been dodging me and my lawyer but he was caught on Labor Day. It is ok he is getting financed everyday he is late. He was happy when we did our walk through of his property, I guess so since he wasn't going to pay, at least i got a down payment. But the lawyer will get the rest. Contract signed and all paper in order. He is a neurologist, so he has the money. If he goes to court it will go on his credit report. Sick and tired of people thinking they can get something for nothing.
     
  2. EngineeredLawns

    EngineeredLawns LawnSite Member
    Posts: 100

    You should sue for more money so hopefully you will get something and the lawyer will not get all of it.
     
  3. Snyderserv5060

    Snyderserv5060 LawnSite Member
    Posts: 194

    I just had to go to court last friday over a non paying (previous) client. Interesting to see they had a record of not paying bills...(2) landscapers and a funeral home. Go figure they didnt show to court for some lame excuse and only their lawyer showed. Its a lot of hassle but in the end im going to get my money. Good luck you eveything.
     
  4. dallas05

    dallas05 LawnSite Member
    Posts: 82

    good for you guys:) . it is scum when people get work done and then don't pay and usually have no intention to pay unless you get them in court.
     
  5. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Yeah, I've got an unusually high number of these cases this year, 4 so far and another in the works and it's not that big of a deal, yet it's TWICE my usual so it needs attention before it gets worse. Everyone needs a system to deal with it, I do agree chasing is an unfortunate evil, if we never chase we send the wrong message and soon we get more and more of these clever type of customers, and don't forget one way or another your company is out of that money.

    Many businesses today take a simple mathematical approach, I only wish I had the resources to pull credit records before even giving the estimate, but one thing I learned is to raise the price anytime I smell a rat.

    That's the gist of it, sure enough the consumer has to absorb the cost, but why should those who always pay on time, you and I and the rest of the hard working folks on earth pay for these slackers to live off our hard earned sweat?

    Hence, in my business the price is always higher for potential credit risks.
    The more I smell a rat, the higher my initial quote goes.
    Sure, some never pay, that's frustrating.
    But some do, I've made over $100 an hour before.
    That helps pay for those who didn't, I'm not making out like a bandit, I suspect it hardly adds out in the end but at least it doesn't sock it to the good customers is my motto, even if they're the ones who have the money and it seems backwards to try and squeeze blood out of a turnip but once again it's about sending out the message, we're not your Lawn boy and you need to pay or else.

    Soon, with marks on their credit record, did you know:
    A credit card company can raise a card's interest rate without warning or notice, overnight?
    > Yes, like from 10.9% to 29%, all because a credit rating went down, it's in the agreement, you did read it all didn't you...?
    Well I didn't have to and likely neither did you, but imagine what this does to someone who has no small balance.

    Insurance companies like to quote higher based on bad credit scores?
    > Absolutely, my car insurance used to cost more before I learned.

    Some employers will not hire those with tainted financial pasts.
    > Large and small, some simply require FICOS of 720+, some 750+!

    Electric co's and phone co's can and will require larger security deposits.
    > Fico 800 OH SIR you do not need a deposit we will hook you up TODAY!
    > Fico 500 uhmmm ok we will need you to stop by and drop off $400 first, if you pay cash we'll hook you up shortly after.

    No, not everyone does it, but sure enough the cost of living goes higher and higher for those who don't pay, if they stiffed you they still pay later, one way or another they pay, somebody is going to collect and so what goes around must come around.

    Best of luck, me I use a collection agency, same thing: Mark on their credit record.
     
  6. razor1

    razor1 LawnSite Bronze Member
    Posts: 1,985

    "He is a neurologist, so he has the money".

    Wealthy people are sometimes the worst offenders. :angry:
     
  7. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,926

    Smart move taking him to court! I am about to take some people to court as well for nonpayment. These people think that ignoring my phone calls, emails, and a certified mail demand letter will make the job free. Sorry folks, life doesn't work that way. The small claims limit here in GA is $15K. I take no one to court for less than half that. Even if a late payer only owes $100 on paper, I "find" punitive damages to collect on to bring the total to at least $7500.00. Life's so cruel, isn't it?
     
  8. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    You know, at first it seems like you're way overboard there, but then I think about the times (like now) when I got a few that haven't paid and likely never will. And I think about how I get to where I just want to drive over there and beat the living crap out of one or two, and suddenly your idea doesn't seem but so outrageous anymore.

    I'm fixing to go put a lien on someone's house, but even that doesn't work for all scenarios, because it's not always feasible.

    It's just like the late fee, I've used $45 for a long time and nobody ever paid it.
    So then I lowered it to $30, that's really the lowest I can go figuring all the extra work I have to do, I figured give them a break maybe some will pay, but still nobody paid it. In hindsight, this no longer surprises me.

    So back to $45 it went, but I split it into two parts, $30 by the third notice and another $15 when it gets sent to collections.
    Maybe I'll reverse it, $15 first, then another $30... Whatever.

    The trick I'm trying to figure out, like yourself, is how to keep tacking it on.
    Because short of a southern-style azz-whooping, it really seems the only thing that works is to let them know if they don't pay now then they're going to end up paying for the most expensive lawn service they've ever received, and keep making it worse and worse.
    If you want to stay within legal limits, then make life extremely uncomfortable for the deadbeat.

    That, and to find a system that works with minimal cost and effort on your part (thou every deadbeat comes around provides just enough fuel to push me one step further), that bit is a challenge.

    Maybe I'll suggest to the collection agency to allow me to enter a % for interest that accrues over time.
     
  9. Snyderserv5060

    Snyderserv5060 LawnSite Member
    Posts: 194

    When my lawyer read over my contract and information about late fees he informed me that (at least in MD) my late fees would be considered completely unreasonable in a court of law. I was asking for something like 15-20% of the bill (considering many of them were 4 cut lawn bills I had to make it worth my time and push them to pay). Even at 15-20% it was never much of a late fee...
    When I had to take the last person to court he insisted I drop the late fees off the total. He said that if a judge saw them and how "unreasonable they are" they would probably not award me the entire amount. So according to what im told it's like 2.9% or something, who's going to be scared by that? At this point I put 20% late fees to scare people but dont enforce it =-/

    And yes to the comment above, my non-payers are generally those with the most money and higher paying jobs. The people I took to court drive BMW's, have a million dollar home, kids in private school...all probably because they dont pay their bills.

    Good luck
     
  10. Chilehead

    Chilehead LawnSite Bronze Member
    Male, from Stockbridge, GA
    Posts: 1,926

    Let me tell you what works. In fact, let me tell ALL of you what works! For me, a $50.00 late fee is incurred for every 10-day late period. There is no cap for this recurring fee. When a customer is 5 days late. I serve a genuinely friendly courtesy call. I repeat this call at 8-9 days. At 10 days the fee gets tacked on, and I start to be a bother at day 12. I will call morning, mid-morning, late-morning, noon, early-afternoon, mid-afternoon, late-afternoon, suppertime, and evening. Calls stop at 8:00pm because of the law. I continue this through day 18, on which I send out a demand letter demanding payment including all late fees due within 10 days of the date on the letter. This letter is sent via certified mail. On day 31, I process a small claim in the amount of no less than $7500.00 dollars. It's up to the judge to decide how much I win, and if the defendant fails to show up in court, I win the full amount of the claim. There have been several ex-clients who have failed to show up in court, and I am look forward to collecting my $18K for the trouble. For those of you with small limits like $5K--take late payers to court for the full $5K!!!! You have nothing to lose!
     

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