I want my money (All of it)

June 19, 2007 11:02 AM

How to collect a debt from a incorporated company.

A company owns me money for services rendered. They are incorporated (I believe in NY state). I have no contract or other paperwork apart from my excel spreadsheet showing amount worked and pdf copies mailed as invoices but I have a check made out to me (That I got as security to hold until they paid me). That account never had sufficient funds in it so I can not cash the check. What's my best bet to get my money? How much would a collection agency take? I really have no idea how to go about this. I'm in MA if it matters. Any pointers as where to go from here are welcome and appriciated.

posted by Ferrari328 to Work & Money (13 answers total)

What kind of money are we talking about? If it's small enough, the hassle of collections may not be worth it and a write off as bad debt is in order.
posted by dr_dank at 11:11 AM on June 19, 2007

Response by poster: I wish it was small enough but it's about $20K
posted by Ferrari328 at 11:20 AM on June 19, 2007

Best answer: You should contact the district attorney in their area and explain that the company wrote you a bad check for services rendered. They encounter that a lot, but the fact that it's a 20k check will get their attention.

The district attorney will sue them in court for you.

At least that's how it's done here in Austin, TX.

But, yea, call the DA office for their area. They're there to help.
posted by lockle at 11:34 AM on June 19, 2007

They wrote you a bad check. I would leverage this to your advantage and contact an attorney to help you draft a letter that states the check is bad and to remit payment with in two weeks. Otherwise you will have no choice but to report them to the proper authorities. This might get your cash without having to go to the legal route.
posted by bkeene12 at 12:29 PM on June 19, 2007

You're forgetting + interest now, of course.
posted by TomMelee at 12:32 PM on June 19, 2007

I have a check made out to me (That I got as security to hold until they paid me). That account never had sufficient funds in it so I can not cash the check.

I'm really confused by this. Did you know the account lacked funds when they wrote you the check? What are the circumstances?

You need a lawyer, plain and simple. IANAL, but this sounds like a dispute over an implied contract, which is something no one can help you with here.
posted by mkultra at 12:36 PM on June 19, 2007

Wait, was it one of those "Here is the payment in full, but don't cash it until you're done, as we're only going to put money in the account then" checks, or was it just 1/2 or 1/4 of the total payment, as a security?

Either way, check fraud is no joke. Call the DA and you may not even need to get your own lawyer. However, if it's not the full payment, a lawyer will need to help you to recover the rest of the money.
posted by The Esteemed Doctor Bunsen Honeydew at 12:41 PM on June 19, 2007

Question 1: do you have any reason to believe that the company HAS the money somewhere? If the answer is no, stop. You're done. You get nothing. If the answer is yes, proceed.

Massachusetts small claims limit is $2,000, unfortunately. So you're going to have to sue in grown-up court. Find a lawyer, explain the situation, tell him you want to keep things cheap so you get most of your $20K back. Sue (you can sue in Massachusetts), win, go find assets of the company that you know exist (see question 1, supra), confiscate them, get your money, pay the lawyer, keep the rest.

Parallel track that you can pursue regardless of your answer above: contact the police and make a complaint of check fraud. Probably the police will not do anything, but you can try.

Lesson to learn in the future: don't do $20K of work for someone you met over the internet without getting paid in installments.
posted by jellicle at 12:53 PM on June 19, 2007

Question 1: do you have any reason to believe that the company HAS the money somewhere? If the answer is no, stop. You're done.
Maybe not.
posted by exogenous at 1:04 PM on June 19, 2007

have no contract or other paperwork


Irrespective of the outcome of this case, it's always better to have a contract. I insist on it for freelancing. Have a lawyer friend draw you up some boilerplate. Especially for $20k! If it's a $200 job, maybe not, but that's about my upper limit for non-contract work. It makes it a LOT easier if things go wrong.

You need a lawyer.
posted by lalochezia at 2:40 PM on June 19, 2007

Yeah you are going to have to go a real court for this and get a judgement. After you get the judgement there are all sorts of things you can do to collect your money. Your lawyer will assist you in this task as well if you can't do it yourself.
posted by bigmusic at 3:03 PM on June 19, 2007

Given that you have a check I don't see why you would focus on the contract issue. They wrote a check, presumably they meant to pay you. If they have put a stop on it then the onus will be on them to explain why they would do such a thing and why they wrote the check in the first place if they never intended to pay it.

Personally the first thing I would do is deposit the check. I'd argue that you don't KNOW there's no money in the account since it's not your account. It's not your problem to verify - they shouldn't write checks they don't have the cash to pay out on, that's fraud.
posted by phearlez at 3:07 PM on June 19, 2007

Response by poster: Thanks all, lot of good advice, I didn't even think about check fraud. I know there is no money in the account since I can walk in to the bank that issued the check and ask if the check would clear if deposited.

Thanks again, I feel much better about this issue now. Possible check fraud should give them more incentive to pay than threatening with a lawyer or a collection agency.
posted by Ferrari328 at 5:43 AM on June 20, 2007