Anyone placed a judgement against a business?

[Scott Shepherd]

We have a customer that just will not pay their bills. We stopped doing work for them some time ago and they owe us what I consider a substantial amount of money. They dispute nothing we say, they don't dispute owing us the money, they just won't pay it. In the last 12 months, I think they have made 3 small payments on it, with the last one being probably in the summer some time. We have repeatedly asked for a detailed plan on when they plan to pay us and they refuse to do that. They will say "We're sending out a check at the end of this week", and then they send nothing. When it doesn't come and we contact them, they just refuse to answer us. So we'll lose contact with them for another month or so.

The last thing I want is to give 1/2 of what's due to some collection agency or lawyer, unless it's the last play in the book. In talking with a customer of ours, they said "file a judgement against them, we do it all the time". They said it doesn't cost anything, you just go to the courthouse, file it, then it goes before a judge, if you show the documentation from the invoices due, along with email correspondence, then the judge will take action against their bank accounts and/or property.

Anyone have any experience with this? Is that how it all works? Does it work?

We'll probably contact our lawyer tomorrow about it, but I'm hoping to gain some insight into it all before then.

[Rich Riddle]

It's fairly straight-forward to file a claim in court against an individual, business, etc.. Most times the judge will allow you to add the cost of attorney fees and filing/court charges. How judgments are handled depends upon the state in which you file the claim. The other type of judgment you are discussing is similar to a mechanic's lien or a contractor's lien on a title to a home. Those are fairly straight-forward as well, BUT if you are in Virginia the lien must be filed within 90 days after the completion of the last work. In other words, if you haven't worked since last summer on the project, the time limit for a simple contractor's lien has passed....unless of course you do a bit more work on the project to restart that date. If you are in Virginia, look at the following link with whom I have no affiliation. It explains the process well.

http://www.fullertonlaw.com/construc...irginia.html#c

[Scott Shepherd]

Thanks Rich, we can't do the contractor's lien because it's a balance due for a number of smaller projects, none tied to any particular large construction project. Last year we started down the construction lien against another company and they immediately paid us. Didn't have the money for 8 months, then we told them we were going to file a construction lien and they had the money right away. Some people just love to use other people's money until the pain is too great from the consequences and then they'll stroke the check.

These 2 customers have been valuable lessons on how we conduct business. This is the last one out there we need to clean up.

Is a judgement the right thing to do in this case?

[Jerome Stanek]

I had a customer that owed me a large sum and couldn't file a lien either as the time limit was up I called them and told them that I was filing a dispute with their customer as they did a lot of work for them. they ended up making payments and stretching it out over 2 years. My son filed a small claims against a dog breeder and won but she wasn't about to pay so he garnished her bank account and got his money. Boy was she blind sided and made a big stink at the small claims court and the judge told her it was all legal as the court did the collection and she would be held in contempt if she didn't drop it.

[Steve Rozmiarek]

I've been granted a judgement for a business deal gone bad. It was an exercise in frustration. All the judgement does is allows you to file a lien, levy, garnishment, etc. That sounds great, but if the debtor is insolvent and has secured debt, they likely outrank your lien position. That means that a judgment by you will cost you legal fees, which can be billed to the debtor, but if they are on the way to bankruptcy, you will be stuck with those too. I've seen the best success in collections come from aggressive goodwill negotiations. They will much more likely figure out a way to pay a friend before they will someone who is doing their best to make their lives miserable.

A judgement may also force them to become insolvent if they are struggling for legitimate reasons. In that case, a little goodwill can be the difference between them being bankrupt and you losing all, and them making it and you getting paid.

My personal opinion, the money is probably lost already, and it is probably a poor investment to pay lawyers to chase it. Each case is different, but it is possible that an understanding of their position may give you an idea on how to get paid. It's easy to just be mad, it does little good though.

[Rich Riddle]

A judgment is the way to go. You can try to do it yourself if you want. That would be my initial advice. If the other party shows up with an attorney, then I would ask for a continuance in order to find your own attorney. It looks like each party is responsible for his own attorney fees in Virginia which is typical in the states (American Rule) versus the loser paying for all attorneys (British Rule). It won't cost you much to file and the following site outlines the process in a fairly simple manner:

http://www.valegalaid.org/resource/t...rt-2?ref=OnlrJ

People can be jerks with your money. Sorry to hear you are going through that process.

[Mike Null]

I was taken to small claims court by a moving company for failure to pay their invoice. (it was under $1000) I won the case as they tried to make me pay nearly twice what the estimate was for a moving job. I didn't use a lawyer but the judge made them pay court costs.

I also called the sheriff on them as they "misplaced" my table saw under some moving blankets in their truck. "they weren't trying to steal it--it was an honest mistake" which they didn't discover until i called the sheriff.

[Scott Shepherd]

I've seen the best success in collections come from aggressive goodwill negotiations. They will much more likely figure out a way to pay a friend before they will someone who is doing their best to make their lives miserable.

A judgement may also force them to become insolvent if they are struggling for legitimate reasons. In that case, a little goodwill can be the difference between them being bankrupt and you losing all, and them making it and you getting paid.

My personal opinion, the money is probably lost already, and it is probably a poor investment to pay lawyers to chase it. Each case is different, but it is possible that an understanding of their position may give you an idea on how to get paid. It's easy to just be mad, it does little good though.

We've tried to be understanding. Sadly, they are a known, established business, been around for a long time, with a long history of robbing Peter to pay Paul. I've known people that work there and they tell me many times before pay day, they pull a number of them to take apart scrap in their lot to take it to the recycle place for cash, just to pay the payroll. That's been the case for a number of years now. I've done all I can do to try and be reasonable and make arrangements to get paid and work it out. Being nice and understanding isn't working. They seem to take that as a weakness and an excuse to pay others and not us.

They took the work we did, installed it all, and got paid for those jobs, so they got their money, we didn't. They spent "our" money on something else, but that's not my issue.

I think working with them for almost a year now to get paid has been nice enough. I'm done with nice. I want our money.

[Steve Rozmiarek]

We've tried to be understanding. Sadly, they are a known, established business, been around for a long time, with a long history of robbing Peter to pay Paul. I've known people that work there and they tell me many times before pay day, they pull a number of them to take apart scrap in their lot to take it to the recycle place for cash, just to pay the payroll. That's been the case for a number of years now. I've done all I can do to try and be reasonable and make arrangements to get paid and work it out. Being nice and understanding isn't working. They seem to take that as a weakness and an excuse to pay others and not us.

They took the work we did, installed it all, and got paid for those jobs, so they got their money, we didn't. They spent "our" money on something else, but that's not my issue.

I think working with them for almost a year now to get paid has been nice enough. I'm done with nice. I want our money.

You may be better served to go after them. Sounds like they have a cash flow problem. If it is an LLC or Inc, you are stuck chasing the company assets, if its not, you can go after personal assets. Would be in your best interest to determine where the money in the company is, and go after the entity that has it if possible. Long operation means practically nothing for cash flow. Little decisions kill companies, this one sounds like it's dying from something that happened a while back to me.

[Wade Lippman]

I don't know about VA, but around here you can only get a judgment by winning a lawsuit. I suppose they might not show up and you will win by default, but my experience is that never happens.

You can get court costs and interest, but have very little chance of legal fees; at least around here. Like everyone said, if they have nothing, you won't get paid, even if you win. Your lawyer will still need to be paid.

The advice to get an attorney if they show up with one is a bit confused. I presume he is thinking of small claims court, as you will surely know ahead of time if they have a lawyer in a higher court, and you will probably need an attorney to handle the paperwork in a higher court. In scc, around here anyhow, you can't sue with an attorney, and I doubt you could get adjournment to hire one anywhere. If you don't come prepared, you lose.

[Scott Shepherd]

I don't know about VA, but around here you can only get a judgment by winning a lawsuit. I suppose they might not show up and you will win by default, but my experience is that never happens.

Wade, it's my understanding that you file a judgement with the courts, then they are served with the papers, with a court date. We show up in front of a judge, present all the open invoices, details of the work, and email communications. The judge reviews it, if it finds they owe the money and nothing is in dispute, then he does something (can't remember what it's called), which puts a flag on all their banking accounts, and alerts anyone if they are applying for credit. It also allows the judge to seize the assets or money to get it paid for.

I know that's the rough view of it, but that's the general idea on how it's been explained to me. The guy that told me about it said it was very common, nothing to it, it's done all the time for people that won't pay.

[Wade Lippman]

No, that is called a complaint. If you win, you get a judgement.
It is then your problem collecting; the judge has nothing to do with it.
I have always gotten paid promptly, but my understanding is that you have to hire a professional to collect otherwise.
Here the limit is $3,000 in town courts and $5,000 in city courts; maybe $50 to file.
As always, VA might be different.

[Scott Shepherd]

No, that is called a complaint. If you win, you get a judgement.
It is then your problem collecting; the judge has nothing to do with it.
I have always gotten paid promptly, but my understanding is that you have to hire a professional to collect otherwise.
Here the limit is $3,000 in town courts and $5,000 in city courts; maybe $50 to file.
As always, VA might be different.

Gotcha. It's more than $5000. The guy that has done it said this prevented you from having to do all the collection related stuff, that's why he used it so easily. I don't know, but I will know shortly

I've emailed the owner of the company this afternoon, explaining needed to be resolved and he needed to get it touch with me immediately to get it resolved. We'll see how far that gets.

[paul cottingham]

Good luck to you!

We had a customer that owed us a buttload of money, and had no intention of paying. We made a final last-ditch effort by sending an employee who had been a bouncer in biker bars for years to talk to them (he was a very nice fellow, and a skilled network admin.) Voila! they paid us enough of the bill that we were happy. I still don't know what he said to them. As we had already given up on the money, we used the money to go on vacation.

[Steve Rozmiarek]

Good luck to you!

We had a customer that owed us a buttload of money, and had no intention of paying. We mad a final last-ditch effort by sending an employee who had been a bouncer in biker bars for years to talk to them (he was a very nice fellow, and a skilled network admin.) Voila! they paid us enough of the bill that we were happy. I still don't know what he said to them. As we had already given up on the money, we used the money to go on vacation.

Lol! That's a good approach!