Entrepreneurship & Small Business

Customer is not paying outstanding invoice. What do I do ? Help!

  • Last Updated:
  • Nov 25th, 2018 9:07 pm
[OP]
Jr. Member
Mar 17, 2015
124 posts
20 upvotes
North York, ON

Customer is not paying outstanding invoice. What do I do ? Help!

I have a customer who isn't paying his outstanding invoice. He won't reply to my email, won't answer his text and won't even pick up my calls. I tried to offer him if he can break down the amount and make partial payments until the full amount is met. He owes us about 5K and I am thinking of taking this to a collection agency. The customer is located in Quebec.

What do I do?

Any help is appreciated.
20 replies
Deal Guru
Aug 2, 2010
14312 posts
4182 upvotes
Here 'n There
Cocoboy1993 wrote:
Nov 21st, 2018 4:11 pm
I have a customer who isn't paying his outstanding invoice. He won't reply to my email, won't answer his text and won't even pick up my calls. I tried to offer him if he can break down the amount and make partial payments until the full amount is met. He owes us about 5K and I am thinking of taking this to a collection agency. The customer is located in Quebec.

What do I do?

Any help is appreciated.
Collection agency since doin' what you've been doin' ain't workin'.
Deal Guru
Aug 2, 2010
14312 posts
4182 upvotes
Here 'n There
FrancisBacon wrote:
Nov 22nd, 2018 5:43 am
Small claims Court.
Small Claims Court costs money and time and even if you receive judgement does not put any money in your pocket as then you have to still collect which is difficult. Even if they own property you have to wait until it is sold, you need to find their bank accounts to garnishee and then there has to be money in them, you have to share any monies recovered with the others who have writs filed, etc. etc. etc. A Small Claims Court judgement is not a panacea. Using a collection agency, while not a sure thing either and they take a percentage, is quick and easy to start and often scares people more than small claims court as they are worried about their credit rating being ruined and can often cave because they want to stop the constant collection agency harassment.
[OP]
Jr. Member
Mar 17, 2015
124 posts
20 upvotes
North York, ON
I have also learned that a collection agency has their own policy which states if they don't collect anything then I don't pay. Not sure to what extent is it true
Deal Fanatic
Oct 7, 2007
5096 posts
1776 upvotes
Good luck with that. We have had something similar happen to us. Then the customer turned around and tried to sue us and made all kinds of false claims. The thing ended up in SCC but what a horror show. Just watch yourself. Some people just don't play by the rules and will try to cheat every step of the way. A highly educational experience but left me with a bad taste in my mouth.
Deal Addict
May 12, 2014
2061 posts
1537 upvotes
Montreal
eonibm wrote:
Nov 22nd, 2018 10:47 am
Small Claims Court costs money ... you have to still collect which is difficult. ...Using a collection agency, while not a sure thing either and they take a percentage, is quick and easy to start and often scares people ...
Eh, to each his own. I never said small claims is a panacea, but:
- I think that it is cheap (~$100?)
- quick (little need to prepare much, but obviously this depends on your case)
- would scare people more than a collection agency


Collecting on a judgement doesn't seem less likely than having a collection agency collect.

Of course if your customer is a deadbeat, little will help.

One advantage of small claims: you can register the judgement on their credit report.


Final point: in Quebec judgements can be renewed forever, so you can afford to be patient.
Deal Guru
Aug 2, 2010
14312 posts
4182 upvotes
Here 'n There
FrancisBacon wrote:
Nov 22nd, 2018 3:15 pm
Eh, to each his own. I never said small claims is a panacea, but:
- I think that it is cheap (~$100?)
- quick (little need to prepare much, but obviously this depends on your case)
- would scare people more than a collection agency


Collecting on a judgement doesn't seem less likely than having a collection agency collect.

Of course if your customer is a deadbeat, little will help.

One advantage of small claims: you can register the judgement on their credit report.


Final point: in Quebec judgements can be renewed forever, so you can afford to be patient.
Debtors know that a SCC judgement doesn't mean they have to volunteer payment. SCC takes time and money and possible countersuits. Collection agency is free unless you collect. Easy peasy.
Last edited by eonibm on Nov 22nd, 2018 5:59 pm, edited 1 time in total.
Deal Addict
May 12, 2014
2061 posts
1537 upvotes
Montreal
eonibm wrote:
Nov 22nd, 2018 3:33 pm
Debtors know that a SCC judgement doesn't they have to volunteer payment. SCC takes time and money and possible countersuits. Collection agency is free unless you collect. Easy peasy.
I don't understand your point. If a debtor won't pay a SCC judgement, then why would they pay a collection agency?

Certainly you can hassle them more with a judgement than any collection agency can and it can be registered on their credit file.

Finally, I don't consider that ~$100 in fees really counts.
Deal Guru
Aug 2, 2010
14312 posts
4182 upvotes
Here 'n There
FrancisBacon wrote:
Nov 22nd, 2018 3:39 pm
I don't understand your point. If a debtor won't pay a SCC judgement, then why would they pay a collection agency?

Certainly you can hassle them more with a judgement than any collection agency can and it can be registered on their credit file.

Finally, I don't consider that ~$100 in fees really counts.
Exactly my point so you might as well choose the free route.
Deal Addict
May 12, 2014
2061 posts
1537 upvotes
Montreal
eonibm wrote:
Nov 22nd, 2018 6:00 pm
Exactly my point so you might as well choose the free route.


I'd say: if you think your debtor has very few assets and very dim prospects, sure, give it to a collection agency.

But if your debtor has any hint of real assets, a good business, or even just "potential" (eg medical student), then go the small claims route.
Deal Guru
Aug 2, 2010
14312 posts
4182 upvotes
Here 'n There
FrancisBacon wrote:
Nov 22nd, 2018 7:12 pm
I'd say: if you think your debtor has very few assets and very dim prospects, sure, give it to a collection agency.

But if your debtor has any hint of real assets, a good business, or even just "potential" (eg medical student), then go the small claims route.
Very bad advice. Speaking from experience in going after debts to some of my previous businesses for many years, let's be practical here rather than talk in useless generalities:

A 'good' business doesn't guarantee anything, not to mention how do you know how 'good' the business is even if you are able to assess that. You need to find their bank account in order to garnishee, and not the bank, but the actual branch and that is not necessarily easy. Then there has to be money in the account at the time you garnishee or you have to keep sending the Sheriff back. Also, if they are not paying your bills then they are likely not paying anyone else's either so when you garnishee you need to split it with all the other creditors who have writs filed. It could go on forever. Furthermore the business could close before you have any chance of recovering.

As for the debtor having 'potential', try to take that to the bank, so to speak. They could move away, hide or even if they end up purchasing property which eventually gets sold and you get paid out you could wait decades for your money if you get it at all.

Debtors can do so many end runs around you that it will make your head spin. Throwing good money after bad is never a good strategy. For $5K (and your actual cost of the $5K or products or services you provided are less) is it really worth investing time and energy going to SCC on a hope and prayer of collecting? You could try a collection agency first if you are comfortable with their fee and if they don't collected then pursue an SCC action or go right to the latter. However, only you can make that decision now based on the real world practical experience I have provided you in pursuing debts.
Deal Addict
May 12, 2014
2061 posts
1537 upvotes
Montreal
Don't let people scare you away from small claims court. In Quebec (and I must assume Ontario), the process is relatively cheap, relatively fast, and efficient.

Enforcing your judgement is just one more process. Yes, the debtor can try to run. Whether to invest in the process or not is just one more business decision that will be based on your knowledge/best guess of his situation.

But all in all, it's a small investment of time and money if $5000 is on the line.
Deal Guru
Aug 2, 2010
14312 posts
4182 upvotes
Here 'n There
FrancisBacon wrote:
Nov 24th, 2018 8:22 am
Don't let people scare you away from small claims court. In Quebec (and I must assume Ontario), the process is relatively cheap, relatively fast, and efficient.

Enforcing your judgement is just one more process. Yes, the debtor can try to run. Whether to invest in the process or not is just one more business decision that will be based on your knowledge/best guess of his situation.

But all in all, it's a small investment of time and money if $5000 is on the line.
There is nothing 'scary' about SCC, but enforcing your judgement can be one endless often futile process which can take decades. You obviously have zero experience in collecting judgements.
Deal Addict
May 12, 2014
2061 posts
1537 upvotes
Montreal
eonibm wrote:
Nov 24th, 2018 9:30 am
There is nothing 'scary' about SCC, but enforcing your judgement can be one endless often futile process which can take decades. You obviously have zero experience in collecting judgements.
Wrong again. I have lots of experience collecting on judgements. Including collecting on ones that are so old that there was more due on interest and fees than in principal.

But once someone has bought a house, they will pay. The bank won't take kindly to having a judgement mortgage registered on the property. The wife won't take kindly to a bailiff coming repeatedly.

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