What Would You Do? Non-Payer Help

[frugalmama4]

Hello,

I need some help please.

I have a family who up an left with out payment, long store short they have a balance of $230.00 (tuition and late fees). I really don't wanna go through the hassle of going to court, however I need to protect myself... these people are nasty...

I received the termination notice via email (which is against policy) should have been written form prior to the last day of service and the last two weeks paid in full. I responded back to their email accepting the notice and gave them a deadline to pay in full. Deadline came and went...nothing. I did mention in the email "tax statements will be held"

My question to you all,

Should I mail a follow up letter via certified mail also? This way if they try pushing the issues on the tax statement...and we do go to court I have proof they we're told "tax the statement will be held"

Thx...I hate this part of the business.

[MyAngels]

What are you trying to accomplish by stating "tax statement will be withheld"? That won't stop them from deducting what they've paid to you on their tax returns. There's a procedure they can use to deduct it even if you won't give them your SSN or EIN.

I'd send them a certified letter giving them a date to pay up. If that date passes then I'd either take them to court or turn it over to a collection agency. They are counting on the fact that you don't want to go to court and that's why they have not paid. Personally, I'd call their bluff on that.

[frugalmama4]

So they can claim daycare expenses with out my TIN? Well that ****s!

Does it cost me to turn it of to a collection agency?

[MarinaVanessa]

So they can claim daycare expenses with out my TIN? Well that ****s!

Does it cost me to turn it of to a collection agency?

Yes they can claim the expenses with or without your information, all they have to do is say that you refused to give it to them which technically isn't legal. You can use belongings as ransom but I wouldn't ever use tax paperwork as ransom or you can find yourself in a heap of IRS troubles for refusing them this info especially if they asked you for it and provided a w-10 and now that they have it in writing.

Yes it costs money to turn in the debt to a collection agency and from what I was explained (but who knows, maybe different agencies work differently) you need to provide proof that they owe you money. An email of refusal to pay for the money owed could work but a court order is better.

I'd definitively send another notice via certified mail and keep a copy for yourself. Itemize the fees and amount and state that you gave them a deadline which they ignored and that unless they pay you what they owe by Thursday at 5pm that you will be filing in small claims for the amount that they owe, late fees, court costs, legal fees and loss of income for any time that you have to take off from daycare. You might not get all of the late fees but if you prove your case you can get the money you are owed, court fees, loss of income fees (if you have to close daycare and don't charge your clients for the day or if you pay someone to sub for you) and part of the late fees.

Then once you have that order you can give them a deadline to pay the fees or they face sending their account to collections. Collection agencies work 2 ways ... they either "buy" the debt from you and give you a portion of the amount that they owe you and then it's up to them to get payment from the client but regardless of whether or not they ever recover the money you get money OR they try to get the debt from the client and when they do they send it to you minus a % that they keep for recovering the debt.

[frugalmama4]

MarinaVanessa

Would you also include/mail a copy of the child care agreement they signed?

Thx

[MarinaVanessa]

MarinaVanessa

Would you also include/mail a copy of the child care agreement they signed?

Thx

If you want to yes I would. I would even highlight the policies that say anything about 2 week written notice, required payment of the final two weeks, late fees, and if you have a policy that says what will happen if they don't pay (like taking them to court) then I'd highlight that too (on their photo copy).

You can also simply quote your policies in the letter but I think a copy of the contract in full will have a better effect.

[safechner]

I would send them a certified mail and copy the child care contract that they agreed to. They have to pay up within 30 days or you will be taking them to a small claim court with late fees, court fees, etc.. They may think you are bluff but don't let them go.

It happened to me twice. I took them to small court in Texas and I won all of late fees, court fees, and balance owed. They paid me, anyways. It is their faults because I gave them a chance to pay me up without late fees if they paid within 30 days after I sent them a certified mail and they think I must be bluffing, . I won't let them go, anyways!

Good Luck!

[Meeko]

So they can claim daycare expenses with out my TIN? Well that ****s!

Does it cost me to turn it of to a collection agency?

I use Advanced Credit Management in Orem Utah.

They are a collection agency.

It has never cost me one single dime to use their services. They add 40% to the amount to be collected and get that from the defaulter not me. Makes life easier for me, the collection agency goes after them aggressively as they want their 40% and the client learns a hard lesson in paying their bills on time. They have to pay until I have been paid 100% of what is owed me AND the 40% to the agency.

I have it in my handbook that I use them. I let parents know that if their account is turned over for collections, they will owe 40% more and have a ding on their credit. And once it is turned over to collections, they cannot...by law........pay me. Only the collection agency. I wash my hands of it as soon as I turn over the account. That alone is often good enough to have them cough up what they owe.

The last time I spoke to the office (granted that has been about a year ago), they said they help people from all over, not just Utah.

Their number is 801-224-6400

[MyAngels]

One thing that might affect how much you can collect - and this may be different in states other than mine, so you should check for sure - is that unless you have specific language in your contract stating that you can collect attorneys fees, costs, collection agency fees, etc. a judge may not award you anything over and above what is specifically stated in your contract.

Again, that may be different in other states and even other jurisdictions in my state.

I would still not hesitate to go after them in court. For me it would be a matter of principle.

[MarinaVanessa]

I use Advanced Credit Management in Orem Utah.

They are a collection agency.

It has never cost me one single dime to use their services. They add 40% to the amount to be collected and get that from the defaulter not me. Makes life easier for me, the collection agency goes after them aggressively as they want their 40% and the client learns a hard lesson in paying their bills on time. They have to pay until I have been paid 100% of what is owed me AND the 40% to the agency.

I have it in my handbook that I use them. I let parents know that if their account is turned over for collections, they will owe 40% more and have a ding on their credit. And once it is turned over to collections, they cannot...by law........pay me. Only the collection agency. I wash my hands of it as soon as I turn over the account. That alone is often good enough to have them cough up what they owe.

The last time I spoke to the office (granted that has been about a year ago), they said they help people from all over, not just Utah.

Their number is 801-224-6400

This is good information to know. The ones that I have called work differently. Does Advanced Credit Management pay you immediately or do you have to wait until the client makes payments to them? Also, what do they require you send them as "proof", if any, about the client that owes you money?

[Meeko]

This is good information to know. The ones that I have called work differently. Does Advanced Credit Management pay you immediately or do you have to wait until the client makes payments to them? Also, what do they require you send them as "proof", if any, about the client that owes you money?

You do have to wait until they get money out of the parents, but to me it's worth it to let them do the chasing down. Many parents think that they can just take a gamble and that the provider is too busy to want to chase for their money or won't want to take time off to go to court etc. I make sure mine know that I let someone else do it for me...and that they are ruthless!

I take in all my paperwork. Contract which states that I use the collection agency. (Clients sign to agree that they understand all about the extra 40% PLUS attorney fees etc. etc.) Sign in/out sheets, copies of certified mail sent etc. Anything I have pertaining to the account and shows I have tried to get payment myself first.

It's been a while since I needed them, but I assume they still work the same way.

They were nice to work with and kept me up to date with their chase!