Legal Question? Deadbeat clients.?

Question

I rent equipment to the studios. It's a new business located in Los Angeles County.. However I have been stiffed on a few invoices. I have a p.o. and contact info for the producer and company but what can I do to get these deadbeats to pay up? Can I put a lien or other legal action with out costing too much money? I don't want to invest too much chasing these slime bags down. Or do we just write off the loss in taxes? Any resource to get the deadbeat company's name out there so they don't screw any more people? Thank you so much.

Answer 1

Your question is common among small businesses. Here's a few tips on how to take care of this matter yourself.

1. Make a photocopy of the first check you ever receive from a customer or if the customer's bank account changes, make a copy of subsequent checks, so you have their bank account number and bank.

2. In general, in California, if the amount in controversy is under $5000, a business may bring suit in small claims court of the County in which the business arrangement was made or executed (need to check jurisdiction with the small claims court). Individuals may bring suit for amounts up to $7500. Small Claims courts do not allow attorneys unless they are the defendant you are suing. Follow the rules given by the small claims court regarding service of the suit, etc. (follow the rules carefully or the case may get kicked and you have to start over again; they may even have a service to serve the lawsuit).

3. Prepare a simple business letter to the court, describing the facts and how you've been wronged and the precise dollar amount you've been damaged. List and attach any documentary evidence you have (proof of delivery, invoice, contract etc.) Include proof that the lawsuit was served, just in case the defendant fails to appear.

4. On the day of the small claims hearing, show up and hand in your letter brief and say you are there to answer any questions. The small claims court will rule then or send you a ruling by mail.

5. Once you have the ruling in your favor, contact the small claims court clerk and indicate you would like help to collect the judgment. The court should have a program for collection of small claims judgments. Fill out the appropriate forms, pay the clerk's fee, and give them the bank account number of the defendant that owes the judgment. The clerk will work with the sheriff to contact the bank and seize the money by court order. Once the clerk has the money, follow the rules to get it.

ALWAYS CHECK THE LOCAL SMALL CLAIMS COURT RULES.

Other ideas:

- Include a mandatory binding arbitration clause in your agreement or terms and conditions for doing business with a customer.

- Also include interest charges for the maximum amount allowed by law for late payments, so that if you do have to go after a customer, you can get more money to cover some of the time and cost.

CONSULT A BUSINESS/CORPORATE ATTORNEY REGARDING CREATION OF THE PROPER CUSTOMER AGREEMENTS OR IF YOU HAVE ANY QUESTIONS REGARDING THE ABOVE GENERAL ADVICE.

Answer 2

You better do it yourself.

Of course, you can hire a lawyer to take civil proceeding, but, at the end your lawyer, would gain everything. (i.e. you would not receive any money but earn the justice.)