Blood out of a stone: chasing unpaid invoice

[Tom ISW]

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Hi all,

This story is a bit of a long one, but it revolves around the non-payment of two invoices.

Back in June, Company X asked me to write some blog posts for the company. Which I did. The Director of Co. X (whom I’ll call Director X, sounds ominous) asked me to write some blog posts for his personal brand, not the company. He charged this to the company, because he’s the director, I suppose. (Not relevant, but just for context.)

Soon in July, when the invoices were due, Company X said they were having cash-flow problems. I sympathised, and offered a payment plan. The company paid $100 in August, then $150 in October. Many reminders and a Letter of Demand later, he never replied. I then made a VCAT filing, which was heard at the end of November. The tribunal ruled in my favour. The order was for Company X to pay me the full outstanding amount ($460) plus the VCAT fee.

It took an entire day and a half on my part after the ruling to get a response from the Director. He says that the company ceased trading in August, and has no cash or assets. He said to take $150 and leave it be. After getting some legal advice and some negotiation, he agreed to pay $150 and the VCAT fee, since going after a company with no assets will be like the proverbial silicon-based blood donation.

So a few days ago, I accepted his offer, because I wanted this all behind me. Problem is now, he’s gone AWOL again.

Even with this “gentlemen’s agreement” in writing, is there any way I can get that money recovered? Or should I just chalk it up to bad luck?

[bb1]

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That was your first problem dealing with someone with the name ”X”.

At this point I would suggest give up, unless you have some friends in a certain motor bike club,

[Paul – FS Concierge]

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I feel for you [USER=54379]@Tom ISW[/USER] – but unfortunately, I can’t think of anything to help.

[Tom ISW]

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bb1, post: 263357, member: 53375 wrote:

That was your first problem dealing with someone with the name ”X”.

At this point I would suggest give up, unless you have some friends in a certain motor bike club,

Yes, it seems that way…too bad I don’t know any 1%ers.

Paul – FS Concierge, post: 263362, member: 78928 wrote:

I feel for you [USER=54379]@Tom ISW[/USER] – but unfortunately, I can’t think of anything to help.

I’ve run out of ideas. I suppose I’ll just have to swallow it.

[Tact]

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Hi Tom,

Pretty common problem. I’d say it’s not worth your time now, unfortunately.

Might I suggest taking a deposit for future customers.

The first time it happened to me I considered it the cost of a lesson in practical business. That $800 invoice would have been sweet though.

[Tom ISW]

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Tact, post: 263370, member: 79642 wrote:

Hi Tom,

Pretty common problem. I’d say it’s not worth your time now, unfortunately.

Might I suggest taking a deposit for future customers.

The first time it happened to me I considered it the cost of a lesson in practical business. That $800 invoice would have been sweet though.

Yeah, I figured as much. Mr. X usually paid on time, but this time, nada. As the great prophet Alanis Morissette once sang, “You live, you learn.”

[tfowler]

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Hi Tom, you have a court ruling in your favour. There are a couple of things you can do. You can list a default against him with a credit reporting agency… this will affect his credit rating for a period of 5 years whenever he goes for finance, as he is a director, it will affect his personal rating as well. You must give adequate notice of your intent to list a default… I usually send 3 emails or letters giving 7 days to respond, with the fourth contact 3 days later, and the fifth and final notice on the day I intend on listing the default. For the default, I would recommend using Creditorwatch, there is a $20 or $30 monthly fee for joining, but it gives you up to 5 credit reports, (which everyone should use prior to giving credit terms) and listing defaults are free. Creditorwatch are only for B2B transactions and the debt has to be over $150.00
I have had debtors come back 2 years after a default and pay the debt and costs to have the default amended to paid, so that they can obtain finance. There are no guarantees, but at least it is a warning to others.
The other thing you can do is take yourself off to the local magistrates court and use the VCAT order to obtain judgement. This also stays on their credit file for 5 years, and affects their ability to obtain finance in the future.
I personally wouldn’t give up on chasing it. If you would like templates for the default letters, please email me on [email protected] – no charge, happy to help out.

[bb1]

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tfowler, post: 263376, member: 86873 wrote:

The other thing you can do is take yourself off to the local magistrates court and use the VCAT order to obtain judgement. This also stays on their credit file for 5 years, and affects their ability to obtain finance in the future.
I personally wouldn’t give up on chasing it. If you would like templates for the default letters, please email me on [email protected] – no charge, happy to help out.

The last time I checked the filing fee’s for debt recovery at the Magistrates court was about $530, I may be wrong on the exact number.

I think thats substantially more then the outstanding sum.

Do you believe throwing more blood at the stone is worth it.

[Tom ISW]

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[USER=86873]@tfowler[/USER] – that sounds grand! I’ll send you an email!

[USER=53375]@bb1[/USER] – Do I want to spill more blood over it? Well, no. I’m over it. I just believe I should be paid what I’m owed. In lieu of that, I’d like to warn others about him, in case he tries this again in future.

[Tom ISW]

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Just an update here: Director X replied to [USER=86873]@tfowler[/USER]’s brilliant email template within a few hours – he went radio silent before that.

He started ranting and raving that if I filed a default against him, he’d sue me for defamation (I’m also freelance journalist, who needs to brush up on media law every so often – I can’t see how it’s defamation) and he’d “get the default removed within a day.”

His final rickety salvo is insisting he know who I intend to file against (himself or the active company that ordered my work) and only then will he pay the $150 (he’s rescinded his VCAT fee offer.)

I also said if he can afford to fight me with expensive lawyers, he can afford to pay his bills.

The plot thickens…

[Paul – FS Concierge]

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It always amazes me that some people do not think of the alternative…

Order work, then pay for it.

[Tom ISW]

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Last update on this – I filed my default against the company (which he swears up and down was wound up, but isn’t).

According to Creditor Watch, it isn’t the first default that company’s incurred.

He was adamant he’d sue me for defamation and get the default removed immediately. Colour myself sceptical.

I suppose I’ll never see the money. However, thanks to [USER=86873]@tfowler[/USER]’s great advice, I’ve done absolutely everything I could have.

Thanks again, all! Have a great Christmas and New Years.

[Tom ISW]

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…and the company is now in receivership. I saw on CreditorWatch it’s under external administration. Perhaps this is the end of the road?

[Paul – FS Concierge]

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Now your efforts to recover what you are owed will be governed by a different set of rules.

If my experience is anything to go by, you will be contacted by the Administrator via a thick wad of paperwork that does not promise anything…

And you will receive updates in equally thick rafts of paperwork via snail mail from time to time….

[Tom ISW]

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Paul – FS Concierge, post: 263845, member: 78928 wrote:

Now your efforts to recover what you are owed will be governed by a different set of rules.

If my experience is anything to go by, you will be contacted by the Administrator via a thick wad of paperwork that does not promise anything…

And you will receive updates in equally thick rafts of paperwork via snail mail from time to time….

Yes, it’s been fun and games so far, I can only hope for even more jolly good times.

[Author]

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