This topic came up in the current Buy/Sell Discussion. In 42 years of being in business I have won two out of two judgements in court. I used the collection agencies lawyers for cases and each time and all were out of state. I also used them to make collections three times as again all were out of state. Considering the time involved, I would use them if a local ever came up.
The first one was a dealer in Gillette, WY who closed his business, kept a saddle for personal use and went to work at the coal mine. We garnisheed his wages to the tune of $600/ month for three months just before Christmas LOL LOL LOL on that one.
The second one was a dealer who closed her business in Virginia and never paid for a saddle bought wholesale in a purchase of two. We chased her to her grave but the hospitals and doctors got to her meager assets before we could.
The last one was just this last spring. I helped out a young trick rider by shipping his custom saddle to him before he paid it off. He made payments as he got contract jobs over three years. When he got a permanent job with a troupe, payments stopped, so I sicked the collectors on him.
We didn't have to go to court on that one and they got all of their fees out of him too. That one was $762.01 and I got the last penny too. He had to pay some thing like $950. Collection fees on this stuff is usually about 25%.
The time saved on my end is worth it especially when they get their fees on the other end. End of tale.
Replies
I have never had to hire anyone for collecting bad debts, and I've only had a handful of problems in my career.
The first was a California fellow back in 1997 who was paying over time for six months while we kept the art. His payments stopped and our phone calls started. When we reminded him that in the original agreement he signed we stipulated that after three months in default, we would put the work back on the market and he would forfeit his right to the work and his paid money. He paid the balance due and we sent him his original drawing. He got the original, but we issued a limited edition print that is one of our best sellers. We would not have had a problem selling that original to someone else, certainly.
The second issue was a bad check for $37 from a lady in Loveland, CO. When she handed it to me there, I got that feeling it wouldn't be good. I've only had that feeling once. That was sometime in early 2000's and we could call banks back then and ask if funds were available. I did it and learned they were not available. Two weeks later I called again and BINGO, money was in her account and I deposited the check and it cleared. I'm glad I didn't cost her a fee two weeks earlier, cause I might not have ever gotten my money.
We used to do metaphysical fairs in Denver and Colorado Springs. One lady in 2004 wanted a framed repro in our booth, then she moved up to a small original, then she signed a contract to buy something for $4,000. She told me she would be getting a settlement payment in a few weeks and that she would put $100 down on her AMEX and then settle up with me in a month. We kept the art, and when we got home we received a letter in the mail explaining that her daughter needed braces and her house needed a roof. So she wanted to transfer the debt to the framed repro and call it a day. I wrote her back and asked her to see her signed purchase agreement for the original art, and explained that since we marked it SOLD at the show immediately upon entering the agreement with her, that no one else could speak for the work and purchase it from us. I also stated that I would release her from the contract, but that I would keep the $100 for doing so. We didn't hear anything from her about it and she didn't try to reverse the charge on her AMEX, so we kept the $100 and sold the art to someone else. We didn't see her at future metaphysical fairs until 2012. She was kind and gave me a hug and her business card advertising reflexology services. I wish she had also just given me a foot massage for my troubles long ago, too.
During fall 2010 a female doctor in Alabama handed us a bad check for 80 some odd dollars and when we got home from the tour several weeks later the check was sitting in my mail stack returned for insufficient funds. I called her home and she never would take or return my calls. So I found her office on the internet and started calling her at work. No results for a week led me to call my local county sherriff's office to inquire about collecting the debt. Here's just another reason I love living in Wyoming in a small town... The female deputy said, "Barrie, why don't you give me her work number and I'll give her a quick call for you." Later that day I got an email from the doc letting me know that she's just put a money order in the mail for the bad check plus $25 fee for the trouble. Four days later I got the money order. I called the deputy to let her know her call worked and that I was especially grateful, to which she replied, "We like to help whenever we can."
Richard, I need to comment about Smoky Hill in that other thread. Sorry I've taken so long. My mom and nephew departed today, so I'll have a little more time to myself. I'm scrambling to get ready for two shows, but I'll get to that thread very soon. WOOHOO!
My debtor would not answer the phone. I googled her and found a nurse in her town with her name. But could not be sure it was her. Plus, with web info, you can't tell if it is current. The town is large (East Lansing MI) and the name was not uncommon. Nor do I live there. It was the start of show season and I was very busy, so I hired the agency.
When I hired the collection agency, they reported back that she was unemployed and had a lot of debts. I was one of many she owed money to. She had moved in with her mother.
Your solutions rely on living in a small place, and having connections there. Unfortunately, that doesn't work for many situations.
WOOHOO Barry. The small town connections work sometimes. In the "old days" at Crested Butte, CO, I had a trust fund kid pass a bad credit card on me (Knuckle buster days). Called the show manager (not the current gal) and she got the town constable on the kid. I had a money order in a couple days. When all else fails, I guess you can call on the Louisville Sluggers or the firm of Smith and Wesson LOL. That was how the old saddlemakers collected back in the 1960's.
Yeah, my old hand-me-down Webley 38 Revolver uses a Smith & Wesson load. It's a dandy top break standard service weapon my stepdad acquired during Vietnam while on tour as a combat photographer with the Army 9th Infantry Division. I've never used it for anything but plinking cans, though.
I have hired 2 different collection agencies, and have never had any results from them. When I called to check on the last one, the agent just said, "She doesn't have any money". I think they only try for easy ones, then stop further attempts. I don't understand the process of doing it yourself: how do you do this?
I have always done my own collections and I have never had an issue collecting. Two were out of state for bad checks one for a landscape company I was consulting for and a couple were for landscape projects for my own company. Obtaining a judgment is very easy as long as you are a good bookkeeper and it is not very costly either. I have always used a levy to collect on a judgment. Once a judgement is won whether by default or in trial you issue a levy against their bank accounts, property, autos, etc. I have had vehicles repo'd and sold at sheriff's auctions, bank accounts frozen, and personal property seized. Unless they are homeless there are always assets. And don't be fooled by those who say you have to leave them with a certain dollar amount of assets. Only the IRS and Federal bankruptcy court have to play by those rules.