A Business Owner Tried Unsuccessfully to Avoid Paying His Landscaper
Similar to a previous article, my client carried out landscaping services for his commercial customer. The customer neglected to pay my client’s accounts of just over $5,500.00 for services that he had provided.
When a demand letter failed to obtain payment from the debtor voluntarily, on receiving instructions from my client to do so, I issued a claim in the small claims court to recover the principal amount of the debt, plus interest and court costs. The claim was served on the debtor.
In this matter, the customer (now a Defendant) called me upon receiving the claim and advised that he was having financial difficulties and was holding off paying creditors for as long as he could. The debtor agreed to pay and offered the principal sum. But now with additional costs, the debtor paid the principal sum plus an extra $450.00 for court costs and interest.
In this case, I did not have to obtain a judgment. Just receiving the Claim was enough to convince the customer that it was time to pay, which he did - plus interest and court costs.
There are three takeaways from this matter:
- Most accounts that are due and owing that don’t involve a dispute between the parties are collectible relatively quickly through the courts without becoming bogged down in complex or drawn-out court proceedings.
- Debtors sometimes wait until they are backed into a corner and there is a serious consequence to them if they don’t pay. Issuing a Claim makes that potential consequence a reality and these debtors frequently pay once they are served with a Claim.
- Waiting too long to sue a company can be problematic for you. The longer you wait the more insolvent a company may become. It is best to proceed against a company while it is still viable and before it either goes out of business or files for bankruptcy.