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"I'll pay you Thursday, call me after 2pm"

5K views 24 replies 13 participants last post by  boman47k 
#1 ·
How many of you are getting the run around from clients who owe you money? How about clients they are severely past due? Any past 90? any liens secured? How are you handling these people?

We have 1 company that owes us just an ungodly amount of money. He was a builder that filed bankruptcy in the end of '07 and we're still in litigation with him now.

Another company owes us around $3k. He's about 120 days out.

Yet another owes us a bit more than that. Today was his 100th day out and after a conversation with the owner was told to "go F**K yourself, sue me".

And the 4th and final that owes us is a builder holding 10% retainage for work completed in August... waiting game sucks.

So aside from sueing everyone and construction liens, how do you handle these deadbeats?
 
#3 ·
Simple, dont get involved with them in the first place. Check into their backgrounds, references, etc. I've only had to file liens twice. I dont do business with GC's that hold a retainage. Unfortunately the bankruptcy problems I can only see getting worse, collect what you can while you can.

I think I can only remember a few homeowners I had to put on a payment plan, and they had valid emergencies for excuses. Stuff happens and I would have no problem working for them again.

Old pro taught me years ago a simple little adage; "Check their financial viability so it doesnt become your financial liability."
 
#5 ·
Thanks for the input! Unfortunately just about all the commercial GCs here hold retainage for larger jobs. Not working for them equals not working much at all for us. All but 1 of the people who owe us money we have history with. The one that filed bankruptcy we worked with for about 4 years before getting bent over.

You're right about things only getting worse though. Even though I believe things are slowly starting to improve, it's not going to improve fast enough to save many of them that are teetering.
 
#4 ·
I went to look at a house a couple months ago. Guy called me up and was buying a house and wanted an estimate for the interior. Exterior was done, and all trim and cabinets were done, all walls were still raw and needed to be painted. I met with a paint rep out at the house and the rep said.. why is this place not done? I told him I had no idea.. that the soon to be owner wanted the bid. He told me "before you THINK about doing this job.. you run their credit." That was the first time I had thought to do that. I don't know why, after all I AM a business owner..

I have a property that owes me from last September. I am going to give them one last time to pay. At the end of next month I am going to take it to small claims court.
 
#6 ·
I went to look at a house a couple months ago. Guy called me up and was buying a house and wanted an estimate for the interior. Exterior was done, and all trim and cabinets were done, all walls were still raw and needed to be painted. I met with a paint rep out at the house and the rep said.. why is this place not done? I told him I had no idea.. that the soon to be owner wanted the bid. He told me "before you THINK about doing this job.. you run their credit." That was the first time I had thought to do that. I don't know why, after all I AM a business owner..
How can you run their credit without a SS#? Or did they give that to you? I dunno if my clients would give me theirs haha.
 
#7 ·
well.... paint rep is a good friend of mine. He told me a way to get around that. You need to get their addy and name and all, all the numbers (if you couldn't get the SS# from them by being upfront and honest asking them for it explaining just what the situation is) then call up the paint store and ask the manager if they could run a credit inquiry for a credit account for the paint for their place. That when you get the job, they are going to want to set up a credit account to get needed supplies. Told me that they will run a credit application for you.. and will tell you if they are accepted and if they are... good bet they are credit worthy :D He has been in the biz a LONG time :)
 
#8 ·
well.... paint rep is a good friend of mine. He told me a way to get around that. You need to get their addy and name and all, all the numbers (if you couldn't get the SS# from them by being upfront and honest asking them for it explaining just what the situation is) then call up the paint store and ask the manager if they could run a credit inquiry for a credit account for the paint for their place. That when you get the job, they are going to want to set up a credit account to get needed supplies. Told me that they will run a credit application for you.. and will tell you if they are accepted and if they are... good bet they are credit worthy :D He has been in the biz a LONG time :)
Sounds illegal.
 
#9 ·
maaaaaybe. I don't know. It was just a suggestion.. and I take it it is done quite a bit. On these same lines, when they get your info at telecom places trying to sell you long distance.. they check credit, or insurance companies when giving you a quote. There are a lot of times it is checked that you may not know about. :( Not saying it is right, but.. If need be I guess it is an option. I ended up just giving him a quote without doing any of that.
 
#10 ·
I got taken for 16k a little over a year ago by a GC who filed bankruptcy right when I finished a job for him. If I had done a bit of research before hand, it would have saved me a lot of heartache.
It forced an immediate restructure of business. In fact, it damn near wrecked me.

http://www.painttalk.com/f2/protect-yourself-1589/
 
#12 ·
I got taken for 16k a little over a year ago by a GC who filed bankruptcy right when I finished a job for him. If I had done a bit of research before hand, it would have saved me a lot of heartache.
It forced an immediate restructure of business. In fact, it damn near wrecked me.

http://www.painttalk.com/f2/protect-yourself-1589/

Doesnt say much for the guys integrity does it? Bankruptcy filing doesnt happen over night, so I guess I would question if he was in the process of filing and waiting approval when he had you do the work? I thought there was some sort of legal provision that any debts taken on while filing; ie: subs/materials, had to be paid in full during the bankruptcy process.

I've watched new home builders in this area go tits up and saw what happened to their subs and suppliers. Usually you can get listings from the courthouses on bankruptcy filings. A couple years ago, I had a GC contact me and was somewhat wary about his reasons. He had been using the same subs for years and now he wants to change? I wasnt buying the "I like your work" BS either. Checked with the courthouse and he was in the midst of a bankruptcy filing. Can you imagine he didnt tell me about it?!?:eek:
 
#13 ·
Gee - I got bitten by a GC with a $1,000 bounced check - I didn't even see it right away - and he didn't seem to worried to let me know either - I had to threaten the guy with lawsuit and the whole nine yards - and even when I got the second check, he didn't compensate me for all the bounced check fees - I finally got my money - by talking to the supervisor in the bank to make sure there was money in his account before handing me back the money.

My loss is small in comparison to many - but it left a bad enough taste in my mouth not to work for G.C.'s. Not to mention every painter in my area that gets use to working for G.C.'s - seems like their company just goes down hill, not being able to afford decent trucks/vehicles or equipment, never any signage, no advertizing. It's almost like it's easy to get 'pigeonholed' when working and depending upon G.C. price structure.
 
#14 ·
Just to clarify what happened to me. I was contacted by the GC in late November. I had done maybe 5 or 6 jobs for him over 10 years. Decent guy, always paid promptly. He built very high-end luxury homes, only a couple per year, most were sold for more than a million bucks. I would go in and install some decent wallcovering in a powder room, or kitchen, or master bath, just to help them get sold.

This time, he has 6 houses sitting on the market for sale. He tells me he wants me to paint some areas in them with a high-end paint (BM Matte) to help them get sold. Entryways, hallways, kitchen, master bedroom, etc. My bid came up to 25K. He balked, but only for a second. He cuts me a down payment check of 8k which deposited with no problem. We start the job in early Dec.

2 1/2 weeks into Dec., he is a no show for my 2nd 1/3 draw. I call him a couple times with no answer/call back.Into the third week, he calls me and says he's sorry, Aunt died in Cali, I'm out here tying up her affairs, yada yada. I say cool, get with me when you get back.

We finish the job on Dec 23rd. I start calling him the week after Xmas, no answer. Somewhere in the middle of Jan., I call and his cell is shut off. I hunt down his office number, same thing. Hunt down his home number, and start leaving messages there.

Leave town to do a job in PA the 2nd of Feb, but before I go, I hand my contract over to my lawyer and tell him to get my money. When I got back the send week of Feb, the lawyer laid the bad news on me. The guy filed bankruptcy on Jan 1.

Starting in October, the unions were starting to lien all his properties and proceeding with lawsuits. He owes the eletrciians over a million bucks, and the drywallers around 800K, and so on. My 16k was a drop in a big bucket, and I was at the bottom of the chain if money was ever going to be handed out by a court. So yeah, I am phucked.

I TRULY BELIEVE he contacted me to tidy up these homes to get them sold and get himself out of debt. If I thought he intentionally screwed me, I would have had to go ghetto on him. But, I don't, it wasn't personal, I just happened to be the last guy in a sad chain of events that crushed this guy.

And there you go.
 
#17 ·
Yeah I can understand that, particularly the last paragraph. Sometimes its tough to keep the personal feelings and business feelings separated. There are always a few times each year I have to weigh those feelings. It does say something for your integrity though.
 
#19 ·
G/C's & Developers

A lot of GC's going under around the country. The last quarter of '08, I lost $6000, due to a GC going under. I had 2 of his houses near complete when things shut down.

Luckily, for me, I didn't have all my eggs in one basket and was able to weather through. But, be careful out there, when things get tough, people get nervous.
 
#20 ·
A GC that I've worked with quite a bit in the past with no hold ups on payments now owes me $2,000. Its been about 2 months since completion. It was an addition and I was going to lien the house but was advised against it by a lien agency. The lien agency's advise was to file small claims and not to lien, because I was hired by the GC not the homeowner. They also told me that the homeowner would have the right to sue me for 3 times the amount the lien was filed for because its putting a mark on their record and its the GC's fault for not paying the subs. Anyone come across anything like this?
 
#21 ·
Sounds about right to me. If you had work done at your home, and the GC didn't pay one of the guys then he did that to you, how would you feel?

Why should the H/O pay the GC's debt when they don't owe it to you?

I'm not from your side of the pond so don't know the ins and outs but can't you do a lien against the GC's home?
 
#22 ·
If you guys notice it is the big guys giving you the run around. Many have never been in this situation before. It is because they can't get credit, or the amounts that they can get have been really limited.

I have 3 big clients in this boat with me. One I have a pretty friendly relationship with. He told be that his credit rating went down because what he owes on his properties is too much after the banks reappraised his stuff..... Now his debt to equity ratio is all screwed up. This sucks, but it is the situation we are all in (The Banking Crisis). I am going to try and stay patient and positive and continue to drop by these people and get some face time.

I think its a lot harder for these guys to screw you if the actually see you every once and a while.
 
#25 ·
debt to equity ratio is all screwed up
Know how that feels. Actually debt to income ratio in my case. We need to keep this in mind when co-signing on loans, I guess. I have shed one loan that on me, and am thinking very seriously of paying my daughters auto loan off and letting her just repay me less any interest. I feel this might put me in a little better shape regarding my credit rating.
 
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