Small Claims Court for Unpaid Invoices: Tips and Insights from Business Owners

[jendill]

I have a customer who has owed me $150 for going on 5 months. I have made lots of attempts to contact her to get the money. I know it is my fault for placing the order before payment was received, but I want to take legal action. Has anyone gone to small claims court?? What was the out come and was it worth it?

 

[esavvymom]

Have you already given her the products?

 

[jendill]

yes, I received the checks in the mail and was missing hers and 2 checks were made out to the host instead of me, so I sent those back and she said she would put new ones in the mail....which I never received.

 

[chefsteph07]

Does your host know you are ready to file legal action?

In January, I had a host who owed me $150 as well, she insisted she mailed it, blah blah, I never doubted she mailed it but I just never received it and everytime I would ask her to issue me a new check, she would tell me to keep waiting for the check (um, excuse me???) and finally I sent her an email and told her that if I did not get my $ from her I was going to file a police report within 2 days. Wouldn't you know that she replied to me within about a half hour and told me to come and get the rewritten check that afternoon.

It might be worth a shot to simply let her know you are ready to file a report against her and see what happens.

 

[ChefKelebel]

@Jendill: If you are serious about filing a SC Action, you need to do a couple of things first.

1. Get all your paperwork together, including her order form that shows no payment has been recieved. It's going to be imperative to document that she's never made payment on this order (because it very well could come to your word against hers. What if she says in court that she paid you in cash?) So if you have any emails that indicate her admission that she's still in debt to you, keep them! (If you don't have any clear documentation, just her promise to pay over the phone, write up a written summary of those conversations, including any original conversations you had at the show when she promised to pay).

2. Make a final attempt to contact her for a demand of payment. Send her a certified letter of demand with a copy of her order form and letter of demand attach. Be sure you put a deadline on this letter such as, "if I don't receive full payment of $(____) by (DATE), I will have no further option to pursue any and all legal actions entitled to me in this state, including reimbursement for any/all legal fees incurred.

3. Go online to your local county courthouse website if you have one, and print the instructions for filing a Small Claims action in your City/County/State. If your courthouse doesn't have a website handy, call your nearest county courthouse and ask where they have their Small Claims Division (sometimes they are only available in one courthouse during very specific hours/days).

4. After your time period has lapsed, just follow the instructions, fill out the form, include your documentation and pay the filing fee. You're probably going to have to pay someone to serve her the legal documents, you can contact your Police Department to see if they have off duty sherriff's that can do that for you. (It just can't be you), or you might be able to serve her by mail. Refer to your local jurisdiction rules. If there is a fee, you can ask for that to be reimbursed by her in court.

5. You'll be assigned your trial date and then you both will have to show up and present your evidence. Then the judge will make a decision. If you win, you'll be issued a judgement, then you have to go through the courts to have them attempt collection/get a garnishment of wages.

OR...you could just call her and ask her for your product back since she clearly can't pay for them.

Hope that helps, good luck, it's a long arduous process, but if you have the time and resources, it will be worth it.

 

[ChefKelebel]

oops, I just re-read your post and it doesn't look like you were asking for help on how to file, sorry, I just got wrapped up To answer your question, yes, I've filed actions in Small Claims court and have been successful, but the key is documentation!

 

[lt1jane]

oops, I just re-read your post and it doesn't look like you were asking for help on how to file, sorry, I just got wrapped up To answer your question, yes, I've filed actions in Small Claims court and have been successful, but the key is documentation!

I think BOTH posts did an excellent job of answering the first question. If you were able to give such a detailed answer, you have obviously gone through that before.

 

[Shelly Flanagan]

I haven't been to SC court before, but have gotten a bad check. All I had to do with that was turn it over to the magistrate and they arrested her and she not only had to pay me back she had to pay court costs, fines and got her pretty little name in the paper under forgery/uttering/theft. Too bad your pursuit isn't that easy.

 

[PamperedK]

I haven't been to SC court before, but have gotten a bad check. All I had to do with that was turn it over to the magistrate and they arrested her and she not only had to pay me back she had to pay court costs, fines and got her pretty little name in the paper under forgery/uttering/theft. Too bad your pursuit isn't that easy.

Why would they arrest someone for writing one bad cheque?

 

[Shelly Flanagan]

Why would they arrest someone for writing one bad cheque?

I don't know what state you live in, but in WV it is a CRIMINAL offense to write any bad check. No matter if it's only one and no matter how small. Though this one was for $127. And in my state, if you commit a criminal act and they can't find you, they put a warrant out for you. Then when they find you, they arrest you.

 

[PamperedK]

Seriously? That seems crazy to me...I mean if you are purposefully committing fraud by writing bad cheques I get it but to be ARRESTED for something that could arguably be a mistake seems crazy.

 

[kam]

Thank you Chef Kelebel for the info. Anyone who has read this and starts having an inkling that we might not get the money knows now that we should start documenting the conversatons!

 

[PamperedK]

I should say you're not crazy for using the law the way you should I've just never heard of anything like that!

 

[Shelly Flanagan]

Seriously? That seems crazy to me...I mean if you are purposefully committing fraud by writing bad cheques I get it but to be ARRESTED for something that could arguably be a mistake seems crazy.

I went 3 months without her paying me back before I decided to go this route. Why should anyone have to foot the bill for someone else? I tried contacting her, the number on the check/and the one she gave me, were both disconnected lines and the certified letter I sent came back unsigned for.
When someone writes a check that doesn't clear, the bank it is written on sends their client info that it was unsatisfied. So this person was well aware that they bounced a check and they had all intentions of NOT paying it back because they could have contacted me and said "oh my, so sorry, let me get you the money I OWE YOU" but they didn't.

I had a check come back once that was written on a closed account. I didn't jump the gun and assume they wrote it on purpose. She called me the day after I got my notification saying she was so sorry, she wrote it out of the wrong book and we met that same day for her to give me cash. I didn't rush out and have her arrested, things happen, people make mistakes...but the writer of this thread has waited 5 months and hasn't been paid back. If I were her, before small claims, I would contact a prosecutor in my area and ask what they could do to help me. I would then contact her and say - I contacted a prosecutor and will further proceed if I do not have the funds by this date_________________ (even if they can't help in this situation I would threaten her with they could because that might be all that is needed, thinking you might go to jail over it.) I don't get paid to chase people around. It is exhausting and frustrating. Let the law do their job that they get paid for.

 

[PamperedK]

I went 3 months without her paying me back before I decided to go this route. Why should anyone have to foot the bill for someone else? I tried contacting her, the number on the check/and the one she gave me, were both disconnected lines and the certified letter I sent came back unsigned for.
When someone writes a check that doesn't clear, the bank it is written on sends their client info that it was unsatisfied. So this person was well aware that they bounced a check and they had all intentions of NOT paying it back because they could have contacted me and said "oh my, so sorry, let me get you the money I OWE YOU" but they didn't.

I had a check come back once that was written on a closed account. I didn't jump the gun and assume they wrote it on purpose. She called me the day after I got my notification saying she was so sorry, she wrote it out of the wrong book and we met that same day for her to give me cash. I didn't rush out and have her arrested, things happen, people make mistakes...but the writer of this thread has waited 5 months and hasn't been paid back. If I were her, before small claims, I would contact a prosecutor in my area and ask what they could do to help me. I would then contact her and say - I contacted a prosecutor and will further proceed if I do not have the funds by this date_________________ (even if they can't help in this situation I would threaten her with they could because that might be all that is needed, thinking you might go to jail over it.) I don't get paid to chase people around. It is exhausting and frustrating. Let the law do their job that they get paid for.

No no like I said in my follow up note...I don't think YOU'RE crazy for doing it - I just think that some people won't be reasonable like you (or the OP) and wait...I can totally see someone trying to get another person arrested without even trying to contact them and resolve it, that's all. It just seems weird that there's not other consequences first, before arresting someone....I don't think you're in the wrong - I just think the law is a little weird. Not meaning to be confrontational.

 

[Shelly Flanagan]

No no like I said in my follow up note...I don't think YOU'RE crazy for doing it - I just think that some people won't be reasonable like you (or the OP) and wait...I can totally see someone trying to get another person arrested without even trying to contact them and resolve it, that's all. It just seems weird that there's not other consequences first, before arresting someone....I don't think you're in the wrong - I just think the law is a little weird. Not meaning to be confrontational.

Yeah you are right, some people might not wait a reasonable amount of time. I didn't want to do it, but I had no recourse. It sounds like the OP doesn't either. I knew you weren't being confrontational, I just wanted to explain why I did it so no one thought I was just being a jerk. I waited and gave the benefit of the doubt for quite a while.

 

[esavvymom]

The problem would be, if you try to contact them, and they ignore you (embarassed or not, that's not cool).....you don't know if this is the first time it happened. Some folks are just compulsive about things like that, or do it regularly. It may be once to you, but it could be the 10th time they've done it.I do appreciate the detailed steps. Definitely not something I've ever considered. The only person I ever have had bounce checks was family. But lesson learned and easier route I guess would be to NOT have the products delivered if you haven't received the money (ship the show to me, vs host, then deliver all BUT that order to her.)

 

[jendill]

Thanks for the good advice! I have left phone messages and plan to show up at her home tomorrow before going to the courthouse. I also have documentation, so hopefully I am good to go. Just makes me sad that we were friends for so long and she can't even call me back =(

 

[jendill]

Does your host know you are ready to file legal action?

In January, I had a host who owed me $150 as well, she insisted she mailed it, blah blah, I never doubted she mailed it but I just never received it and everytime I would ask her to issue me a new check, she would tell me to keep waiting for the check (um, excuse me???) and finally I sent her an email and told her that if I did not get my $ from her I was going to file a police report within 2 days. Wouldn't you know that she replied to me within about a half hour and told me to come and get the rewritten check that afternoon.

It might be worth a shot to simply let her know you are ready to file a report against her and see what happens.

yes, and I gave her 5 days. It was a voice mail message on her cell phone. The email I sent was sent back. I also left her a Private message on face book that was connected to a thread we had previously started. I never heard a word.

Thanks again for all the advice. I've learned my lesson!

 

[kittychef]

I had 4 bad checks in one show!! I had to go through the whole contacting them, sending them the certified letter, then waiting for their response. Since they never paid I had to turned it over to the DA's office. It is such a hassle! But like you I've learned my lesson! I'm going to wait until all of the checks clear before submiting a show.
Hugs! I hope yours goes smoother than mine

 

[esavvymom]

I received this from my hosp. NED today. It seemed so fitting:

Let's start working with our hosts to ensure this 'business practice' is in place.Kathy
I guess I play hardball with my hosts: here's what I say upon exiting each home at the end of the night:
"After tonight, no more checks are made out to me. These outside orders that you'll collect in the next day or 2, best case scenario is that they pay on their own credit or debit card. Simply get the #, exp, zip and phone number. This is the easiest since then you don't have to handle any money. If that's not possible, then have them make a check out to you, or you take their cash. Then you'll just do one payment to me on the phone when we close your show up on xxx. This will make it possible to close your show that day and everyone will have their products the following week and be super happy!"

I have had maybe 2 hosts in 11 years unable or unwilling to close a show in this way. Easy and 100% paid for. If I wanted to take $ after the products were ordered, I'd sell makeup

 

[wadesgirl]

I received this from my hosp. NED today. It seemed so fitting:

That is exactly what I do for every show! I've never had a problem with it.

 

[chefheidi2003]

That is exactly what I do for every show! I've never had a problem with it.

I never heard of anyone doing this. But I think that this is a great idea. Makes it easy to close over the phone as well.

 

[wadesgirl]

I never heard of anyone doing this. But I think that this is a great idea. Makes it easy to close over the phone as well.

It's so much easier! I've been doing it since I started and love it! No mailing checks - no losing them in the mail or hosts who keep telling you they mailed them, no waiting at all! I even encourage my hosts to email all of their other outside orders so then all I have to do is get their order and payment over the phone, that's it!!

 

[esavvymom]

I have started doing it also when the host agrees. I make it out to be an easier way for the HOST because then we can just close her show over the phone, but it's really so that I don't have to mess with the money issue of bounced checks or late payments, etc.

 

[wadesgirl]

I have started doing it also when the host agrees. I make it out to be an easier way for the HOST because then we can just close her show over the phone, but it's really so that I don't have to mess with the money issue of bounced checks or late payments, etc.

I really don't give them a choice, I tell them that's what I do. The only time it hasn't worked is when the host doesn't have a credit/debit card. If that happens and they are close enough I prefer to go get the money from them rather than mailing it. The funny thing is I tell them this before I leave from their party (so it's fresh in their mind), I've had two that I call to close who tell me at that point they don't have a credit/debit card. Really? Cause I told you that's what I needed and now you tell me?! I have also got a blank check from a host who didn't have one before I left her party. Then I filled in the numbers when we tallied everything up.

 

[Malinda Klein]

An extra point i'd like to add is to check how much the court costs are. As ChefKelebel said, there will be court costs and their could be additional fees to serve your customer papers - just to get the judgement. Chances are, your customer may NOT even show up. If so, your automatically granted a judgement. The next part is to file papers to garnish wages or checking account. IF you don't know her checking account, then you will need to file more papers and go back to court to ask for more information on the debtors assets.. yes a long process and can be costly.

Another option is to go to the bank the check was drawn on, verify the checking account is still open and if funds are not available when you are there to present the check, ask the bank if they will take the item as a collection item for a fee. If so, the bank will hold the check and when the customer deposits enough money for the check, they will pull the amount out of their account and remit the difference to you, less the fee.

I've done this all the time at work (Credit Manager).

 

[brandenc]

I've had a few bad checks before. I give them 10 days to pick it up if not, its sent to the district attorney who will then request for the money to be made through the court. I make it clear to my customers there is a $50 return check fee. My bank charges me for having returned checks so i pass that fee along to the customer. If they fail to pick it up, they go to court and are ordered to pay the check, my return fee, plus court cost. Which court cost here are anywhere from $35 to $300.I only pay upfront for my well known customers. anyone else they will either pay with cash or credit card as I have stopped taking checks.

 

[Bren706]

I filed a claim for a $85.00 bad check. I sent her a certified letter, stating that if I didn't receive good payment within 15 days I would take legal action. After that 15 days, I filed a claim with the clerk magistrate. I never had to go to court, and after a few monthsreceived the $85.00 plus an additional $25 fee that I had added on, from teh court.