Hi, I am an independant contractor with a signed retainer agreement for computer maintenance services for a client. The aggreement has been in effect for over 12 months now, and everything has been going well, but now they are 2 months late in paying me, and I am afraid they will be declaring backruptcy. They are not paying any of their vendors due to cash flow problems. I need this money to continue my business as they are my biggest client.
The agreement did not have any clause about suspending services if their payment is late, but it does have a clause about charging a late fee, but they may never pay the intial amount, much less a late fee. I have never charged them a latefee before, even though some months they have been behind 15-20 days.
The agreement does state that it can be cancelled by either party with 30 days written notice, to allow both parties ample time to find a replacement.
I do not send monthly invoices for payment because since the beginning the checks would come every month pretty close to the due date.
I am worried that if they do declare bancruptcy, I will not be listed as a creditor because I do not send monthly invoices, even though I have a signed retainer agreement.
I would appreciate advice on what kind of documentation I should write, to ensure I have the best chance of collection my payments. This is not a secured debt, i.e. I don't have any liens or collateral being held to guarantee my payment. However I do have access to the bldg, computer systems, and email servers, so I would think it would be in their best interest to pay me on time. I do not plan on doing anything bad in order to collect my money, but I'd like advice on what is considered legal and fair.
Should I:
1. Deliver a letter reminding them about the past due amount?
2. Deliver invoices for the 2 months of service that I have not been paid for?
3. Deliver a letter that informs them that I will suspend service if the amount is not paid by X date?
Will documents like this help my case if they go into backruptcy protection?
Should the letters be delivered via registered mail so I have a signature proof that they recieved them.
I am reading "How to get Paid" by Stephen Elias, for the proper actions to collect from clients who are in backruptcy protection, so I understand my options need to happen prior to the automatic stay event.
I realize that if they do declare BKUP, I may not be able to collect anything, but I'd like to make sure I am doing things the right way to strengthen my case.
I'd also like to know if they try to terminate the agreement without giving the 30 days notice, would I have grounds to take them to small claims court to try to collect?
And is there any collateral I can hold to help my collection efforts, like not giving up my password access to the systems, etc., or would that be considered illegal?
Thanks for your thoughts.
The agreement did not have any clause about suspending services if their payment is late, but it does have a clause about charging a late fee, but they may never pay the intial amount, much less a late fee. I have never charged them a latefee before, even though some months they have been behind 15-20 days.
The agreement does state that it can be cancelled by either party with 30 days written notice, to allow both parties ample time to find a replacement.
I do not send monthly invoices for payment because since the beginning the checks would come every month pretty close to the due date.
I am worried that if they do declare bancruptcy, I will not be listed as a creditor because I do not send monthly invoices, even though I have a signed retainer agreement.
I would appreciate advice on what kind of documentation I should write, to ensure I have the best chance of collection my payments. This is not a secured debt, i.e. I don't have any liens or collateral being held to guarantee my payment. However I do have access to the bldg, computer systems, and email servers, so I would think it would be in their best interest to pay me on time. I do not plan on doing anything bad in order to collect my money, but I'd like advice on what is considered legal and fair.
Should I:
1. Deliver a letter reminding them about the past due amount?
2. Deliver invoices for the 2 months of service that I have not been paid for?
3. Deliver a letter that informs them that I will suspend service if the amount is not paid by X date?
Will documents like this help my case if they go into backruptcy protection?
Should the letters be delivered via registered mail so I have a signature proof that they recieved them.
I am reading "How to get Paid" by Stephen Elias, for the proper actions to collect from clients who are in backruptcy protection, so I understand my options need to happen prior to the automatic stay event.
I realize that if they do declare BKUP, I may not be able to collect anything, but I'd like to make sure I am doing things the right way to strengthen my case.
I'd also like to know if they try to terminate the agreement without giving the 30 days notice, would I have grounds to take them to small claims court to try to collect?
And is there any collateral I can hold to help my collection efforts, like not giving up my password access to the systems, etc., or would that be considered illegal?
Thanks for your thoughts.