Getting money from a corporate client

[boxofrocks]

I have a question about A/R.

I have a very small corporate customer that owes a substantial (substantial to me--let's just say the original balance was 5 figures) amount of money. This is nothing new-they have recognized that they owe me this for almost 2 years. They cry poor whenever I try to collect it.

Several months ago, I threatened to take them to arbitration, which, according to the terms of our contract, the loser would have to pay for. Since they have never denied owing me the money, and expected to have a cash infusion, they renegotiated a contract that said if they didn't pay me by date x, they would grant me an "agreed judgement" (which I have in my posession), and be responsible for retroactive intrest.

About a month after date x, I got roughly half of what they owed. Now they are stalling again. I have what amounts to a judgement signed by them saying they owe me this--I can take it to court and get an official judgement and order to pay.

Problem is, what then? can I place a lien on their bank accounts so that any money goes to me (prior to office supplies, utilities, rent, etc)? Does a judgement do me any good if they still won't pay?

[Happyfunball]

I know a lawyer in the DFW area who can help you, or at least point you in the right direction. I will PM contact info to see if he can help.

[Steelsun]

If you get the judgement signed by the judge, you then would get an attorney to help you freeze the bank accounts (and besides paying the attorney for that, you have to pay the banks also), and then the judge will have to rule again that you get the money in the account.
If it doesn't satify the debt yet, you'll have to find an account again and do it over and over and over.

Another option is to get the judgement signed by a judge, served on the party, give them 30 days or so, then have the sherriff (with you in attendance) walk into the business and start seizing everything of value to satisfy the judgement. It works quite nice to go into the president's office and have him have to stand back while the sherrif and his helpers pack his computer.

Of course that has just been my experience (and what fun it can be), you'll have to consult an attorney for everything to go right yourself.

[laawaaris]

To get a judgement on them is definitely possible. Getting a judgement on the company will essentially cripple them in a financial sense. The company themselves will not be able to get any new loans and they will become suspect when trying to open new bank accounts and do banking transactions, because you will have a judgement against them. To put a lien on their bank accounts is possible - but only after you've had a judgement and you get a lawyer who knows what he's doing. I think there is a lot of time and effort involved from the day you decide to get a judgement to the time a lien happens.

I think you have to spend money to get a judgement but you definitely have to spend time (go to court, meet lawyers, etc) to make it all happen. Another option for you will be to possibly get a Collection Agency involved to get the money for you. They will call and call and call the corporate client of yours demanding payment. But that might not be enough, you should get one who is willing to make a "house-call" to the client's office in the event that they remain delinquent. The purpose will be to cause a "stir" in the clien'ts office so they will pay. I think most collection agencies will only charge you if they collect the money.

The final option is to keep at it yourself. You've got half of what they owe - maybe you can ask them for regular small payments to clear the debt. You said you're not charging interest, so I think this should be an easy way for them to pay. Albeit, this option is like a second job - since it will always be in the back of your mind and you will have to do all the work yourself.

The flip side of all this is that if they have effectively given you a judgement, it means that they are very rocky financially. They may be leaning towards closing their doors for good or going bankrupt. You should call them and ask the lady directly if they are just being stingy with the money or if they are going under soon - ask them what the real reason is they have not paid.

Anyhow, I had to go through all this sort of stuff recently. We had tight money problems in our family and so our family business suffered a lot - and we had a lot of scare about this type of stuff in our business (judgements, liens on our bank account, collection agencies, etc).

Hopefully it works out for you.