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What to do, when client says he is bankrupt?

Discussion in 'BlackHat Lounge' started by peerless2acme, Jun 29, 2012.

  1. peerless2acme

    peerless2acme BANNED BANNED

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    I have come across the excuse, " I am bankrupt and I won't be able to payment now", quite a few times now, and I have realized that one can do little in such cases. Recently, a very old client of mine sent me a mail stating that he is almost bankrupt, and that his financial condition is worse. He was making excuses since past one month but yesterday I received this mail from him. He is saying that his brother was admitted in hospital and he has been swindled .. blah.... blah... blah... I don't want to go into all that details but cutting a long story short, he said due to all these problems he will not be able to pay me at the moment. Though he has given me a ridiculous offer of paying $10 per month starting from August. The amount is mere $200 but in my country $200 means a month's expenditure of a middle class home. I am now in crossroads, whether to file a police complaint against him or wait for him to pay $10 every month. I have his address and contact number, so I don't think he can run away. However, my core purpose of starting this thread was to ask fellow members with tips and method for dealing such a situation because we accept it or not, time and again people scam service providers, and then latter claim to have gone bankrupt, which seams an unbelievable statement.
    Looking forward to all the replies. Cheers :)
     
  2. steelballs

    steelballs BANNED BANNED

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    I hate to say this and I appreciate $200USD is a lot of money in your country

    But you may have to 'bite the bullet' and stand the loss as the legal route will cost more to process than the $200USD debt!

    It's tough but that is the way it is sometimes.
     
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  3. Seadragon

    Seadragon Regular Member

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    Maybe you could come to an agreement to accept a small payment monthly until he get's back onto his feet. In these tough times there are more and more people being bankrupt and it's not as rare as people think now.

    Accepting a smaller payment per month might be the way forward until he is able to make payment, other then that you can really do much. No point filing a police report against him, he hasn't broke any laws. He simply can't afford payments, which aint a law breaker!
     
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  4. Danny1111

    Danny1111 Elite Member

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    small claims court I guess - that's only option not sure what you have in your country though.
     
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  5. Duffers5000

    Duffers5000 Elite Member

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    I send out a solicitors letter.. First letter is stating the amount owed...how the terms have been broken.....how you are dissapointed that the situation has to go legal but you want a resolution with 14days......If they dont respond the second solicitors letter is a notification that unless the bill is paid in full within 7 days you will be issuing proceedings and they will be liable for costs....80% of people pay or come to an arrangement by the first letter... I only go down this route with people who I know are messing me about and have no intention of paying. If I believe a customer is just having a hard time I will do my best to work with them so we can go forward..In the UK a solicitors letter is about £20-£30. Really its just to rattle their cage if they dont pay me theres no way I am going to go to court so I just write it off as a loss. Its amazing how people who have avoided your calls and emails are suddenly on the phone when they get an official looking letter.
     
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  6. Zak_A

    Zak_A Jr. VIP Jr. VIP Premium Member

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    I think steelballs is right about the uselessness of the legal route (it will cost you a lot, and if your client really end up bankrupt, you won't get anything).

    But you haven't even lost $200 right now, as he offered to pay you $10 a month to compensate - as ridiculous as it sounds, it's still better than getting nothing.

    Maybe the best thing you can do is to accept his offer (and as a compensation ask him to pay $10/month for say 22 months instead of 20) and hope he won't totally go bankrupt so you'll end up getting your money back :)
     
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  7. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    If he's genuinely declared bankruptcy, I doubt he'd be offering you a payment plan. If he can't afford it, then getting paid monthly isn't the worst option for you.
     
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  8. steelballs

    steelballs BANNED BANNED

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    OP There is your solution and take my advice of living in Asia for over 15 years the legal avenue is useless!
     
  9. Duffers5000

    Duffers5000 Elite Member

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    If you go down the few quid a month road it would only be with someone you think will be around for the period and is trying to get themselves back to speed. My experience of these arrangements is you will get 2 maybe 3 payments before they dissapear again. Like Meathead said if they are legally bankrupt either personally or commercially or if they have liquidated their company then forget about it..its gone. If however they are just having difficulty then you need to get in first and get your money. When guys are going under they prioritise who they must pay and who they can get away with not paying...dont be on the non urgent list
     
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  10. ferma231

    ferma231 Elite Member

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    Maybe stop doing any business and move on.

    Arent your services made to get them more money? I bet they are, if people dont understand that you help themto get more money, then just forgetthem and move on, probably you will find someone who would pay much more than others
     
  11. JustLearningTheRopes

    JustLearningTheRopes Registered Member

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    I have had to take someone to small claims court before but it was for around $3,000. I will go ahead and tell you this. It was practically a waste of time. I paid $80 for filling costs, had to pay for travel back there because I had moved and hours preparing just to go. Good thing is I won the case. Wait though, even though I won the court can NOT make him pay me. If he does not pay me they give me details of other routes I can take to collect the money since it was documented that I won the case. Great, BUT then the other things to do to collect the money cost you more money. 1 of the options would have cost $250 per an occurrence which there was no set limit to how many times it would have to be done. Long story short I won the case but got nothing and was out the $80 filing fee. This past month has been a year now and I am in the process to collect with the $250 method which in my situation is worth it since it is 3K but for your case of $200 it wouldn't be worth it.

    I would say try and ask them to see if there is any way that they could possible swing sending you $25 a month. At least that way it would be payed off within 8 months.

    I know ever case is different but I just wanted to share a personal experience with you. Hope it helps some.
     
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  12. peerless2acme

    peerless2acme BANNED BANNED

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    Even I hold the same opinion but the point is that he can be lying. Waiting seems to be the last resort at the moment, if what I understand from all the comments I have received from the people over here. I can wait but waiting for such a long duration is a real torture and then checking that he paid every month or not is yet another burden. If I believe him, then I should wait for 10 long months. This guy is going to test my patience.
     
  13. Seadragon

    Seadragon Regular Member

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    He could be lying, but at the end of the day, you have no actual way of knowing if he's lying or not.

    Some money is better then nothing, if you decide to accept smaller payments. the thing is he's offered a payment, yes, maybe not what you wanted, but it's money in your back pocket for the service you've provided.

    it's best to try and work out a solution with him yourself and keep calm and try to deal with him as if you yourself would be in that position (if he's not lying that is)
     
  14. peerless2acme

    peerless2acme BANNED BANNED

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    I agree with you completely but I still don't know whether he is genuinely bankrupt because back in our country there is no such thing as filing bankruptcy. Waiting is the worst option but it seems that I don't have a better option at the moment, so I would be giving him a go ahead and wait for the month of August, and just hope he starts paying $10 per month, which again sounds really hilarious to me. I sometimes get a feeling that I should stop bothering about the money and assume that I gave it to a beggar. But can we learn a lesson from my situation?
     
  15. ff1227

    ff1227 Junior Member

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    Find a new client. There are only millions of them to choose from.
     
  16. Seadragon

    Seadragon Regular Member

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    I think the lesson will be for you to at least get a portion of the money upfront before pushing on with the service for your clients. 50% or even 25% etc.. the one's that are serious about your service are more than likely to go for that.

    I understand where your coming from, but there is no way of knowing what his situation is, try and reason with him, maybe even say i'll take 50% and call it quits. There's a few ways you can get at least some of the money you deserve for providing the service to him.

    Can you retract the service what you've done for him? if it's links, delete the links. if it's website related, can you remove it until he's paid etc.. ahhh just seen your signature, is it content related? hmm.. tough to get that back if so.

    end of the day, try and get something at least and then move on, in business you'll come across these kind of people regular and there isn't much that can be done to stop it from happening in the future. You may just have to cut your losses. You'll end up spending more time trying to squeeze payment out of him, where as your time could have earned that money back in other ways.
     
  17. infoasian

    infoasian Supreme Member

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    Let your bankrupt customer breath. Maybe he will be able to pay a small fee every month and be your customer again. He will appreciate and maybe you get your money after some time.

    It's not worth the effort and time to go after him. It's a no-win situation. Filing a complaint with Police? Hey, they have to hunt down criminals. They won't deal with your BS. It's not a criminal offense to be bankrupt unless he had never intended to pay you (you have proof?).

    Move on to new challenges.
     
  18. gingerbuzz

    gingerbuzz Junior Member

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    sweetie he is taking the p*** he sees you as an easy target. So stand upto him and tell him if he doesnt pay you, you will publisize the fact that he owes you and undo all the good work you have done for him. Sometimes you just gotta get tough and get dirty. I am by enlarge a good hearted person but i so get peed off when people take advantage. Come on if he was really bankrupt he wouldve known before he took you on. So that makes him a super turd for using and abusing you. Just pretend your russian and start shouting for your cash!
     
  19. nothingnothing

    nothingnothing Jr. VIP Jr. VIP Premium Member

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    Do you have a signed contract ?
     
  20. fistor

    fistor Regular Member

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    A mind needs books as a sword needs a whetstone, i
    just forget about those 200$ and claim those 10$ per month.
    that way you wont be disappointed if you do only get 30$,50$,100$ etc.

    Lesson: do not do a thing for someone, if he didnt pay you first :)
    excluding email/phone support of course.