Affecting a corporation's credit report
November 15, 2006 4:34 PM Subscribe
How does a small business go about filing a mark on another small business' credit report? What other sticks are available to encourage invoice payment?
The short version is that I (a registered sole proprietorship in Ontario, Canada) did some work for another company (a single-person corporation) and there are outstanding invoices that are approaching 120 days overdue.
Because I am an idiot I don't have a contract (though there is a history of paid invoices and quite a lengthy email history with promises that I will be paid), and because it's only $1400, something like small claims court probably isn't worth the time, effort or expense.
About the only real stick I can think of would be in affecting his credit record, but I am doing a very poor job of getting through the polluted "credit report" namespace, and don't see much information on the various agency sites that isn't geared towards consumers looking to improve their score.
If anyone has any other suggestions that might encourage payment, I would appreciate them. I have a much higher PageRank than the company, but I don't think a "[company name] is overdue on invoices!" page is a good idea, as much as it appeals to the vindictive bastard in me.
The short version is that I (a registered sole proprietorship in Ontario, Canada) did some work for another company (a single-person corporation) and there are outstanding invoices that are approaching 120 days overdue.
Because I am an idiot I don't have a contract (though there is a history of paid invoices and quite a lengthy email history with promises that I will be paid), and because it's only $1400, something like small claims court probably isn't worth the time, effort or expense.
About the only real stick I can think of would be in affecting his credit record, but I am doing a very poor job of getting through the polluted "credit report" namespace, and don't see much information on the various agency sites that isn't geared towards consumers looking to improve their score.
If anyone has any other suggestions that might encourage payment, I would appreciate them. I have a much higher PageRank than the company, but I don't think a "[company name] is overdue on invoices!" page is a good idea, as much as it appeals to the vindictive bastard in me.
Best answer: I am not familiar with Canadian laws, but here in Texas is it very simple and painless to file in small claims court. It costs about $60 and we win almost every time.
Usually what happens is: We file the claim, DeadBeat Inc. gets served by a constable, check comes in mail.
The times we do actually go to court, we don't need a contract. Common law has worked in our favor: we had proof of an "order", we did the work, and we have not been paid. Court finds in favor of the plaintiff, and awards a judgement against DeadBeat Inc.
Total cost to us: $60 court fee (added to the judgement), two hours at the courthouse.
posted by chitlin at 5:02 PM on November 15, 2006
Usually what happens is: We file the claim, DeadBeat Inc. gets served by a constable, check comes in mail.
The times we do actually go to court, we don't need a contract. Common law has worked in our favor: we had proof of an "order", we did the work, and we have not been paid. Court finds in favor of the plaintiff, and awards a judgement against DeadBeat Inc.
Total cost to us: $60 court fee (added to the judgement), two hours at the courthouse.
posted by chitlin at 5:02 PM on November 15, 2006
Response by poster: parmanparman, I am but it is just one guy in his house. I am somewhat concerned about harassing his family, though that concern does lessen every day.
Chitlin, at what point do you draw the line and file the claim? 4 months? 6?
posted by cCranium at 6:25 PM on November 15, 2006
Chitlin, at what point do you draw the line and file the claim? 4 months? 6?
posted by cCranium at 6:25 PM on November 15, 2006
Best answer: I am also unfamiliar with Canadian law in particular, but I don't think you should sell yourself short on whether or not you have a contract; an agreement need not be recorded on paper with the signatures of both parties in order to be legally binding.
I second chitlin's (implied) suggestion that you seek something like small claims court. If you win there, you can probably get something like a judicial lien against the counterparty, which can be enforced (I'm not sure of the mechanics of this) against various items of his property, perhaps even if he declares bankruptcy.
If you don't want to pursue a lawsuit, you probably have lots of options under provincial and/or federal law. This page describes debt collection rules from a debtor's perspective; you can get an idea of what you're allowed to do from pages like that. Worst case, you could probably sell the debt at a moderate discount to a debt collector in your area and be done with it. Check the phone directory for local debt collection agencies.
Of course, before you actually take any of these measures, you could politely inform this person that you would rather not take such drastic measures, but you may have to if the account is not settled soon, etc. I would put that somewhere between "polite status inquiry" and "filing a lawsuit" in terms of seriousness of threat, but I'm not sure exactly what that means in terms of timelines. From my limited consulting experience, however, 4 months is way too long to wait on an outstanding bill; you're definitely entitled to be a bit cranky at this point.
posted by rkent at 7:15 PM on November 15, 2006
I second chitlin's (implied) suggestion that you seek something like small claims court. If you win there, you can probably get something like a judicial lien against the counterparty, which can be enforced (I'm not sure of the mechanics of this) against various items of his property, perhaps even if he declares bankruptcy.
If you don't want to pursue a lawsuit, you probably have lots of options under provincial and/or federal law. This page describes debt collection rules from a debtor's perspective; you can get an idea of what you're allowed to do from pages like that. Worst case, you could probably sell the debt at a moderate discount to a debt collector in your area and be done with it. Check the phone directory for local debt collection agencies.
Of course, before you actually take any of these measures, you could politely inform this person that you would rather not take such drastic measures, but you may have to if the account is not settled soon, etc. I would put that somewhere between "polite status inquiry" and "filing a lawsuit" in terms of seriousness of threat, but I'm not sure exactly what that means in terms of timelines. From my limited consulting experience, however, 4 months is way too long to wait on an outstanding bill; you're definitely entitled to be a bit cranky at this point.
posted by rkent at 7:15 PM on November 15, 2006
Have you written some stern e-mails? In the past I've made the mistake of being too lax with demanding payment, and it's had the effect that the client will pay as late as I let them. Sometimes it just takes prodding.
After that's done a lot of people will recommend calling a collections agency, which I think will take a fairly modest percentage, and you'll get some money (and some satisfaction ;)).
Personally though, if I had documentation I could use (which it sounds like you do), I would go the small claims route. For me though, $1400 is a fair amount of money (I'm a college student), and hell, I've got nothing better to do.
Good luck, stupid clients suck.
posted by !Jim at 8:40 PM on November 15, 2006
After that's done a lot of people will recommend calling a collections agency, which I think will take a fairly modest percentage, and you'll get some money (and some satisfaction ;)).
Personally though, if I had documentation I could use (which it sounds like you do), I would go the small claims route. For me though, $1400 is a fair amount of money (I'm a college student), and hell, I've got nothing better to do.
Good luck, stupid clients suck.
posted by !Jim at 8:40 PM on November 15, 2006
cCranium, in answer to your question, we usually wait around six months just in case the people really are planning to pay but something's awry. Sometimes our clients have to submit a bill to their client for approval/payment, etc.
First we send a "demand letter" which is just a letter requesting payment within X days (usually 15 or 30), and we tell them that after X days we will pursue other methods of collection. If we don't hear from them at that point, we file.
posted by chitlin at 5:28 AM on November 16, 2006
First we send a "demand letter" which is just a letter requesting payment within X days (usually 15 or 30), and we tell them that after X days we will pursue other methods of collection. If we don't hear from them at that point, we file.
posted by chitlin at 5:28 AM on November 16, 2006
Best answer: The things you do 'in public' (like filing a judgement) will make it onto his credit report. If you want to take a more direct route, contact Dun and Bradstreet. My gf works for them (selling of credit services to companies) and frequently requests for investigation/update to company reports based on a variety of factors. Recently, for instance, there was a family out in the midwest murdered by their son. As it turns out, the father was owner/CEO of several businesses listed in DnB databases. She posted investigation requests for those businesses.
There's another dept that does the actual compilation of data. From what she's told me, the call around checking references, credit histories, etc, on a pretty frequent basis. Perhaps you can get on their call list.
Oh, and you'd be surprised how 'small' the companies are they track.
posted by jdfan at 6:27 AM on November 16, 2006
There's another dept that does the actual compilation of data. From what she's told me, the call around checking references, credit histories, etc, on a pretty frequent basis. Perhaps you can get on their call list.
Oh, and you'd be surprised how 'small' the companies are they track.
posted by jdfan at 6:27 AM on November 16, 2006
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posted by parmanparman at 4:47 PM on November 15, 2006