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Debt Collection 101

January 18, 2011

Got a call from one of my vendors yesterday. He is my #1 guy for all things cleaning. Not just the once over quickie cleaning but getting the grout white again and making marble shine so I can sell your house kinda guy.

Turns out that one of his favorite clients had her house cleaned and then fell off his radar. The house is on the market and apparently the client is getting a divorce so the house is vacant and my guy is not getting his phone calls returned. There was some communication from the client that the husband [or soon to be ex-husband] was less than cooperative with the communal check book, ergot, the problem.

First thing we did was gather a little information. I looked up the listing. It’s on the market, active, vs being in contract or sold. The mailing address on the tax records has not changed – even though the house is vacant.

Plan of action: 1) call the agent and see if she can facilitate payment. 2) Send a demand to mailing address and agent. This puts the client on notice that this bill needs to be taken care of. 3) Put a demand into escrow – so if and when the property sells, my buddy gets paid. 4) 30 days after the demand is sent, file suit in small claims court.

99% of the time, sending the demand gets things moving along and my buddies don’t have to continue.

It sounds like this is just a temporary glitch in my buddy’s clients’ life and she’ll want to keep using his services for years to come. I believe the majority of folks are good folks and the relationship can be continued with a little firm but compassionate nudging.

What do you think? If someone owes you do you get more mileage with the sword or with honey?

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