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Past client owes billing service.

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Carin532:
Hello everyone, I was wondering if anyone has ever had a client that switched billers, and ignored their bill?
My client wanted to switch billers being she was offered a lower fee. I charge a percent, therefore I don't get paid until the provider gets paid. I have fulfilled all of my obligations. She has paid me twice since moving forward with another biller. She owes me quite a bit of money. She is now 60 days past due. Being she owes me quite a bit of money, I was sending itemized bills every other week. Any advice on proceeding?
I'm thinking about putting on her next bill "Please make payment to avoid further legal action" but I'd love some input before doing so.

Thank you for your time,
Carin

Tameka79:
Hi Carin532,

I don't have my own billing company as yet, but I would say what is the terms of the contract agreement you signed with this client? If it is stated in the contract that payments need to made at a certain time and she has passed this time, then I think you can proceed to take legal action. 

I am assuming that maybe you don't want to go that route just as yet, so maybe you can contact the provider by phone or in person since you have already sent several bills, and remind her of the legally binding contract she signed.  Maybe that may get her attention. 

RichardP:
The world is full of people who have won their lawsuit against people who owe them money.  Winning a judgement, and actually collecting any dollars, are two different things.

However, if you sue and win a judgement, you then have a legal basis for placing a lien against the assets of the person against whom you won the judgement.

1.  Don't sue to collect money, because you likely won't be able to.

2.  Sue to be able to place a lien - although the likelihood of collecting in this situation is not much better than in Point 1.

Experience is not free.  It has a cost.  This is one of them.  Perhaps record the money lost as past of the overhead of life.  And realize that it can happen again.  Contracts allow you to win in court.  They don't guarantee that you will ever collect the money owed.

PMRNC:

--- Quote ---I charge a percent, therefore I don't get paid until the provider gets paid. I have fulfilled all of my obligations. She has paid me twice since moving forward with another biller.
--- End quote ---

This is a problem with % based billing, It would be good to think about another way to charge. I use a flat fee model based on hourly rate. I don't have to wait to get paid for the work I put in.


From your post it sounds like she's got money trickling in that you billed and it sounds like your working on month 2 or 3 correct? I'd tend to agree with Richard that you might want to take a wash. When she has another biller she's thinking why pay both of them? Again, that's another problem with %. Another model of pricing your services would alleviate that problem all together. You can look into your state's small claims limit and if the amount meets the limit you can do small claims which may prompt them to pay. Another solution would be to settle... if your still trying to collect monies you billed months ago, settle on ONE fee maybe based on an average of last 3-6 months. Send a letter and offer her that one last fee.

Michele:
Unfortunately we have had situations where providers try to ditch out on their last bill.  We have done three things:

1.  Nothing, let it go and learn from it
2.  Filed in small claims court, the problem is there is a limit to the amount.  Ours happened to be under that amount.  But as Richard said, getting a judgement doesn't mean getting paid.  However, we called the provider and said "we won, do you want to pay us?  Or do we need the sherriff to come to collect?"  They were foreign and doing some shady stuff (which is why we cancelled our contract!) so they paid because they were afraid of the Sherriff.
3.  Used a collection agency.  This worked but we lost 30% and had to wait a long time for small payments

Even with a contract it can be difficult when they don't pay.  :(

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