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Collecting a Judgement?
rk2z asks: "I did some independent contractor work about 6 months ago. I delivered the software as specified in my contract and turned in the hours that it took. I then sent the company an invoice for $1400 which was based upon my contracted hourly work rate. They had paid me in the past so I didnâ(TM)t do anything like withhold source code until payment. To make a long story short, they refused to pay me and I ended up taking them to Small Claims court in the state of Nebraska. I won a judgment for the above amount. The problem is, Iâ(TM)m not really sure how to go about collecting my judgment. The amount is relatively small so I donâ(TM)t want to consult a lawyer, because it not really worth blowing the entire judgment before I even get it. But it's big enough that I donâ(TM)t want to give up on it."
"I looked a couple of law websites like here and
here, but their suggestion were fairly broad.
Does anyone have any experience in going after debtors (without a lawyer if possible)? Is it better to go to a collection agency and blow half the settlement up front? If so does any one know a good collection agency?
Things to keep in mind: [the customer] is a small company (less than 7 employees). They have some property like computers and such, but how do I find out what they own vs. what is leased. Owned property can be seized by the Sheriff and sold at auction. I have tried to contact them about a monthly/weekly payment plan, but have been blown off every time I try to make some progress on the issue. Thanks in advance."
Contact a collection service. They take a % of the total (often seems like a large %) -- but remember... getting 80% of 1400 is better than getting 0%, and without professional help that is what you will probably get.
The collection agency has tools to make life hard for those holding out on you (even before you go to court, with the solidity of a court decision, you should be in an even stronger position).
Call today -- and forget about it -- just wait for the check. They specialize in this -- and want their % -- they will get the job done, they deal with hundreds of companies like this everyday.
If you have the judgement, does it specify anything more than an amount? A time frame for example. Here (Australia) these small claims judgements have a time frame - typically 28 days for the payment schedule to be agreed by both parties, failing which the matter goes back to court for a binding ruling. If the debtor fails to pay then they are in contempt of court - a much bigger deal as far as penalties are concerned. Talk to staff at the court - most courts do not like their decisions to be met with contempt.
"Read this part very carefully: This is NOT legal advice. I am NOT a lawyer, much less a lawyer licensed to practice in your jurisdiction."
Are you a law student or some sort of legal worker then? They're the only ones I've ever seen who really really want to make sure that they are not giving out legal advice.
Tim
Omnia vestra castrorum habetur nobis.
Here in the UK a friend was owed money by an agency for some contract programming he had done for them and they wouldn't pay his final invoice. Not couldn't, just wouldn't. As he routinely refers to agents as 'parasites' or 'scum' when in a good mood, he didn't want to mess around and play nice. AFAICR he checked out his legal status first (saw a lawyer about his contract) and then contacted the company threatening them with a winding up order if they didn't pay. This would basically do what it says and end the existence of the agency as an entity - instant extinction, no business able to be transacted etc. - basically a 'nuke the bastards' option, perhaps a trifle extreme but he really doesn't like agents.
Apparently they laughed at him, but when they shared the joke with their legal staff full payment was made immediately.
He can be a little over the top, and he would probably have been happy to take the loss so long as the other guys came off a lot worse, I think he was disappointed that they coughed up.
Did I mention that he doesn't like agents?
I don't know if you have such a mechanism in your state, but if you do a (real) threat to terminate the company is a much bigger stick than garnishing the account - it may be empty, they may just change banks etc. It could be fun to check if you have the ability to do this.
I hereby inform you that I have NOT been required to provide any decryption keys.
IANAL! And you probably need one. But I will say first that I found the post from cpt kangarooski to be quite good. A few comments:
But make sure that you don't pick out things that are exempt by law; you may need to do some research on Nebraska law to figure this out.
In Colorado you can basically take it all, and they have 10 days to file with the court to recover exempt equipment. Also in CO "essential" equipment can be exempt. IOW, they have 10 computers, the sheriff takes them all, the court will give them back the 1 with their QuickBooks file. Also make sure you know how much the stuff goes for on eBay, both so that you know how much to take and so you can show up at the sheriff's auction and bid up to that amount, if needed in order to prevent a bargain hunter from buying it all for $10. Be prepared for them to throw a fit, stand your ground, and don't wind up taking only enough stuff to cover 1/4 of the debt (ahem, speaking from experience here). Don't count on this of course, but the sheriff's department told my attorney that it's not uncommon for a company to send someone to the bank, accompanied by the deputy, to get a cashier's check rather than have their property seized.
It's harsh, and it's cruel, and I think personally I would struggle with the morality of it
WTF??? Companies know how much money they have in the bank, how much coming in, and what their expenses are. They knew they didn't have the money to pay this guy and let him keep working because they wanted, in effect, to steal his work. Yes, they were probably hoping that enough new sales would close that they'd be able to pay their bills, but they had to know there was a chance they'd wind up screwing him. Now on what plane of reality is there any possibility of a moral issue with collecting the debt?
I don't know if you have such a mechanism in your state, but if you do a (real) threat to terminate the company is a much bigger stick than garnishing the account - it may be empty, they may just change banks etc.
Yeah, I'm involved in a long-running attempt to collect from a company that has gone to great lengths to avoid paying their debts (transfer of assets to a sister company in another country, leaving the original US company defunct with all the debts, and forming a new US company with the same executives and employees to continue the development work on behalf of the foreign company). There's no direct way to shut them down, but soon enough they'll find themselves on the receiving end of an action that will force them to pay or guarantee that they'll never be able to sell their product in the US nor get another dollar from investors. The most ridiculous thing is that I've told them exactly what I'm doing, and they're just ignoring me. I guess they think I'm bluffing...
I recall reading some years ago, that a guy in San Francisco was owed money by the local telco (at the time Pac Bell). He won in small claims court, but Pac Bell still ignored him. To make a long story short, the sheriff filed the paper work to sell one of Pac Bell's downtown buildings in order to collect the money. No one else showed, so the the guy ending up buying it for $1. At that point, he got Pac Bell's attention. He ended up selling them back their building for the amount owed plus court costs.
[Insert pithy quote here]
If it's illegal then non-lawyers should not be giving legal advice even with the disclaimer "IANAL". However, consider this case:
He was giving legal advice while admitting to not being a lawyer. He was accused of practising the law without a license. The judgement from the Board ruled in his favour.
So at the very least in this specific case in this particular jurisdiction it was fine to offer legal advice without a license. The Board would have ruled differently if he had crossed the line and started to practise the law.
But fortunately nobody on Slashdot ever gives specific responses because the questions lack any specific details.
Either way, the IANAL is redundant. Either it is legal to give advice in which case you don't need the IANAL. Or it is illegal to give advice no matter how many disclaimers you insert.
if the contract was not fulfilled then it is void
This is a misconception of contract law.
What does it mean if a contract is "void"? It means that each party is put back in the same position as if the contract had never existed. So in the current case, the company would give back the code and the developer would give back the money he got.
However, in this case the problem was that the developer never got any money. The reason he was able to sue on the contract and win shows that the contract is valid. The court ruling was to enforce the contract according to its original terms, not to annul it. Having enforced the contract, all terms in the contract will still be valid, including any relating to IP.
If the company is refusing to pay up even after the judgment, then it's in contempt of court. That's a criminal offence, so what our screwed-over friend needs to do is threaten to report the company to the local DA. In terms of collecting the judgment, he can try a debt collection agency but they'll take a cut of the winnings.
What our friend should have done is consulted a lawyer before going to court. If his case was as open-and-shut as it sounds, then there's no doubt that the court would have awarded him legal costs against the company. So he wouldn't have paid a penny for his lawyer, and the lawyer would know exactly what to do to get hold of the money (and would do it quick since he wants to get hold of his money).
The author of this post asserts his moral rights.