• Last Updated:
  • Nov 6th, 2017 1:46 pm
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[OP]
Newbie
Oct 26, 2015
74 posts
12 upvotes
Calgary, AB

Client won't pay (Marketing)

Hi!

First time I am having an issue with a client. Agreed and signed a contract stating that I would be paid $100 an hour or would be paid a monthly fee depending on the job. For example, if I was working for 2 hours a month then I would get $200, if I was working month to month for a job, I would be paid $2,000 a month.

After signing the contract, client contacted me about a month later and was in a rush and asked me to work on a last minute project (Apparently a contractor just left, you bet!!!). I agreed, but since it was supposed to be a one week job, we agreed on a specific amount. (Not sure if that's legal according to our contract's terms but since I never had any issues in the past, I said ok...)

After the first 2 days, client told me they sent a deposit but had to recall it. Hmm ok? Then 2 days later, account got hacked (seriously?!) then used a 3rd party (legit btw) to send me the deposit. It takes 5 days to clear the funds and I later discovered than you can recall or cancel a payment without the payee knowing! In the contract I signed, client has to pay me within a 30 days period. I also sent an invoice. (At first client didn't want it because they send statements to their freelancers instead, sounds very scammy if you ask me. They agreed to send me an invoice as well just to show me that they had schedule a new payment.....)

So anyway, payment sent, still waiting for the funds to clear and then after the second week, I tell client I am done (I ended up working for 2 weeks after all) until they pay me. Said that was the first time they had issues with payments blablablabla. Resent payment and now payment just failed. Sounds like her account is NSF according to the 3rd party website they use.

It sounds like I will never get my payment, I know. They even had the guts to tell me that payment was sent and withdrawn from their account!!!

Anyway, considering they owe me less than $1,000 what should I do? Collection Agency? Should I simply add it to my taxes as uncollected debts? It's obvious that they may not even have a single dollar on their account.

Thanks!
9 replies
Deal Addict
User avatar
Mar 23, 2008
4751 posts
2323 upvotes
Edmonton
If you want to pursue it, I believe your first step would be to file a Small Claims Court case against the business. That will enable you to get a judgment against them, which will allow you to pursue collections.

If you don't feel like pursuing it, I guess you should talk to your accountant about how to record it.

C
Sr. Member
Apr 10, 2012
688 posts
255 upvotes
A demand letter or a statement of claim showing up on their doorstep is usually a good kick to get them to pay up. It's a bluff, but only you can decide if it's worth pursuing.

Depending on a variety of factors, a small claims action can cost you anywhere from $100-$2500. Even if you don't hire a lawyer (or paralegal), if you consider the cost of your application, time, gas to go to court, printing evidence/contracts/documents, etc., it may not be worth your while.

While you may be able to ask for part of your costs if you win, you could end up paying for the other side's if you lose. If they have a lawyer, their costs will be larger (but it is usually capped at some percentage). Finally, even if you win and they have nothing to pay you...what good is your judgement?

Also, a collection agency will probably not be of any help given the value.
[OP]
Newbie
Oct 26, 2015
74 posts
12 upvotes
Calgary, AB
Thanks for responding. Prior to going to court, you can definitely go with a collection agency. They charge a small fee to take your case and then 25 to 50% of the amount they collect. You can use them after 30 days of late payment basically. And always better to use them pretty quickly. That’s why most of the time if you don’t pay a bill, they will send a collection agency after you probably within 2 months of uncollected debt. If they can’t collect your money, it’s free. They will build a case and will advise you on what to do next. So pretty good if you want to go to court.

Going to court would cost me at least $500 imo and I would have to build a case so that wouldn’t make any sense to go after $150 especially since we are not even in the same province. Court is really for companies that are looking for pretty large chunk of uncollected debts.

I have asked my accountant about how to add that to my tax return.

If anyone has been going through this please let me know!
Member
User avatar
Jul 31, 2016
285 posts
155 upvotes
shahram0 wrote:
Nov 2nd, 2017 4:43 pm
A demand letter or a statement of claim showing up on their doorstep is usually a good kick to get them to pay up. It's a bluff, but only you can decide if it's worth pursuing.

Depending on a variety of factors, a small claims action can cost you anywhere from $100-$2500. Even if you don't hire a lawyer (or paralegal), if you consider the cost of your application, time, gas to go to court, printing evidence/contracts/documents, etc., it may not be worth your while.

While you may be able to ask for part of your costs if you win, you could end up paying for the other side's if you lose. If they have a lawyer, their costs will be larger (but it is usually capped at some percentage). Finally, even if you win and they have nothing to pay you...what good is your judgement?

Also, a collection agency will probably not be of any help given the value.
Where are you getting $2500 from?

Its $75 to file the claim. And you have to serve the other party papers. Thats pretty much it, for costs.
[OP]
Newbie
Oct 26, 2015
74 posts
12 upvotes
Calgary, AB
Paralegal and or lawyer. You can defend yourself but it’s always better to have a lawyer by your side. That’s why taking such a small amount to court is usually useless per se.
Sr. Member
Apr 10, 2012
688 posts
255 upvotes
TicoGato wrote:
Nov 2nd, 2017 11:33 pm
Where are you getting $2500 from?

Its $75 to file the claim. And you have to serve the other party papers. Thats pretty much it, for costs.
If you hire a lawyer/paralegal.
Member
User avatar
Jul 31, 2016
285 posts
155 upvotes
If you think you have a strong case and documentation to back up your story, I don't see the downside to attempting to do it yourself.
[OP]
Newbie
Oct 26, 2015
74 posts
12 upvotes
Calgary, AB
Thanks. It's actually similar to the one in ON and if you look closely, it will cost you a minimum of $100 just to have a claim processed. It adds up when you have dispute note etc. Not worth it IMO for the amount I am seeking.

Was actually able to have client pays but they were over 30 days late.

Hope this thread will help other, I would go with a collection agency is amount is less than $1,000. If you want to push it, I would go with small claim court AFTER trying the collection agency. Cheaper.

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