Any Ideas on How to Collect a Debt?

[Yachtzee]

I like the BBB route myself, and small claims is also good. Those types of complaints will, at the least, show up on the BBB's website or in the public court dockets so that others who might want to hire these folks can see it. You can also call the state's Attorney General to see if they've had any complaints against these folks. It might not get you anywhere, but it might be another way to put pressure on them.

[cincinnati chili]

The follow up emails confirm the debt, and imply a breach of contract on their part, and they will be considered in court. Contract + emails = you win.

I agree with this, and as amused as I was by WOY's post, I don't agree with it. You don't want them to counterclaim for libel. Either do nothing or file in small claims court.

Chances are they will not show up, in which case you will get a judgment. If they do show up, then as R4L says, their lack of denials in the emails coupled with their statements of inability to pay the debt suggest the validity of a debt. I've met you. You are believable. In a he said-she said, a judge has to make a call on your credibility. But even so, you have some documentary evidence as well.

Once you get a judgment, you have several collection options, depending on what type of assets they have and whether those assets are underwater (i.e. slapping a lien on their house, if they own a house and if the value of the mortgages don't exceed the value of the house). If either of them are employed in a regular job, then garnishment may an option. The fact that they are back on their feet in another business suggests to me that they won't declare bankruptcy anytime soon. If they do, as suggested above, you are probably out of luck. As stated above, in most state you'll get interest on your judgment plus filing fees, plus the fees for a process server (if required by your state in small claims court). It won't be worth your time and effort, but it might be a good life lesson in how this stuff works.

if Minnesota is like most states, you'll probably need to hire a process server after you file, even in small claims court (Check into this). Find out where they live and/or a good place where a process server (or you, if your state law allows) can serve them with the papers. Once you've got that plan in place, then you'll want to file in the small claims court that provides proper jurisdiction. In Colorado, this means you would need to file (and go to court) either where they live, where the contract was signed, or where the process server will actually serve them. Minnesota may be different (ask at the courthouse).

[TRF]

I agree with this, and as amused as I was by WOY's post, I don't agree with it. You don't want them to counterclaim for libel. Either do nothing or file in small claims court.

Chances are they will not show up, in which case you will get a judgment. If they do show up, then as R4L says, their lack of denials in the emails coupled with their statements of inability to pay the debt suggest the validity of a debt. I've met you. You are believable. In a he said-she said, a judge has to make a call on your credibility. But even so, you have some documentary evidence as well.

Once you get a judgment, you have several collection options, depending on what type of assets they have and whether those assets are underwater (i.e. slapping a lien on their house, if they own a house and if the value of the mortgages don't exceed the value of the house). If either of them are employed in a regular job, then garnishment may an option. The fact that they are back on their feet in another business suggests to me that they won't declare bankruptcy anytime soon. If they do, as suggested above, you are probably out of luck. As stated above, in most state you'll get interest on your judgment plus filing fees, plus the fees for a process server (if required by your state in small claims court). It won't be worth your time and effort, but it might be a good life lesson in how this stuff works.

if Minnesota is like most states, you'll probably need to hire a process server after you file, even in small claims court (Check into this). Find out where they live and/or a good place where a process server (or you, if your state law allows) can serve them with the papers. Once you've got that plan in place, then you'll want to file in the small claims court that provides proper jurisdiction. In Colorado, this means you would need to file (and go to court) either where they live, where the contract was signed, or where the process server will actually serve them. Minnesota may be different (ask at the courthouse).

It's not libel if it is the truth.

[Yachtzee]

It's not libel if it is the truth.

Whether it's truth or not would have to be determined at court. You have to watch out for different standards for libel too. The law provides somewhat better protection against libel for private citizens than it does public figures.

[Sea Ray]

Thanks for all the helpful ideas. This definitely gives me some options. I sent a concise text to both of their phones this morning as I'm pretty sure they still use them. I just let them know I tried to get in touch with them a few times but haven't heard anything back and that they need to contact me asap or I'll be forced to take legal action. If I don't hear from them by Monday, I think I'll start with a demand letter and then move on to the BBB and then to small claims.

At this point I think my only chance of getting anything from them would be if they don't want a complaint with the BBB for their new business. Otherwise, they have no real incentive to pay me.

I do have a signed contract, but I don't think it helps much. They are going to admit they owe me or deny it. If they deny it, all they have to say is they fulfilled their obligation. The proof that will show they owe me the money is the email where they said they will pay later where they pretty much confirm that they owe me the cash. But I'm not going to go away and I'm half-tempted to take the woy approach.

How can they deny they owe you the money? In your initial post you quoted an e-mail from them where they admitted owing you the money. Just pull out that e-mail if they deny it

[TRF]

If the facts are:

• he owes the money
• he won't pay
• He's opened a new gym and still won't pay

I see no libel.

[fearofpopvol1]

Ohio is very different. We can keep renewing the lien every five years but basically all it does is put a mark on his record. We can't garnish wages because he doesn't have any. We can't pursue accounts or assets because he has none. If the person who owes money can prove insolvency, it is near impossible to collect in Ohio. That isn't likely the case for the gym owners, but you have to ask yourself if the cost of pursuing the debt is worth what will be collected.

Yeah, I can appreciate that point of view. For some people though, it's about the principle.

[Mario-Rijo]

Interesting stuff guys, try this one on for size and tell me what you think I can do if anything.

I had a friend who borrowed 760.00 bucks from me in July '08. We had no contract of any kind, just a gentlemans agreement as I had no reason to doubt him returning the funds. At the time he had just been let go from a job and was about to lose his apartment and what not. I told him to take his time paying me back, no rush just get back to me once he got on his feet. Well in November that same year he had been back to work for about a month although at a much lesser job and he was able to give me 50 bucks, another several months went buy and I started calling/texting asking for anything extra he might have because I was now in a tight spot (this was like May of '09). He finally gives me a check (IIRC) for 150.00 dollars briefly thereafter. Now we chatted briefly around that time about a laptop computer he had and that I was interested in taking it for a portion of what he owed me. He suggested some inane price for it and I said no, but if he changed his mind I would take it for a much lesser price, he said he'd let me know. In like mid July I started calling/texting again and seeing if he could promise some in the near future, I didn't hear from him until early September. He said if I was still interested he has this laptop. I go over and check it out and he has no cord for it, I said I'll take it home and see if I have a power supply cord that I can use on it and if it works fine after I check it out for a while I'll offer you something for it, he says "it's no good to me so just go ahead and take it". Well I had a cord and checked it out and quickly realized the battery was complete toast and the wireless internet card was trashed. So I go and find a cord/battery and external modem (costs about 120 bucks, I got lucky and found them used) and get it going fine. I then shop it around and was able to sell it for 320 bucks. So I figure I would go ahead and knock 200 off what he owed me even though he seemed to just give it to me. Well I can't get him on the phone anymore so I went to his house and left him a note detailing where we were and that I went ahead and managed to get 200 bucks out of it plus what I had in it so I'd knock that off leaving him to owe me 300 bucks, he doesn't respond so I send him an email. After a day he returns me an email suggesting he thought we were now even because he "thought" giving me the laptop resolved the issue. Now he knows doggone good and well we never came to that agreement. So I write this long nasty email really tearing him apart and then I don't send it, instead I simply sent one stating "If that's what you think, then consider it resolved". Hoping that it might guilt him into making amends. It never did and that was around January sometime and I haven't heard from him since and I haven't communicated with him either.

Now I know this doesn't really hold much water in court but I wonder if anyone knows how far back I can get text messages that I have already deleted from the phone company, which would strengthen and perhaps even prove my case. And since he is playing dirty pool I can as well, he is a police officer and a lawsuit wouldn't be a good thing on his resume. So I wonder what would you guys do? Just so you know I am extremely angry with this guy and I am having a really hard time chalking it up to experience. It would be almost worth it to file the suit just to teach him a lesson.

[Redsfaithful]

And that's why you never lend money to friends or family. Either make it a gift or don't do it at all. Mario-Rijo I'd chalk that up to a $300 lesson as personally I wouldn't go through the hassle of small claims court, but others might feel differently.

[KoryMac5]

Mario, it is too hard to prove things in court without a witness or without a written contract. When I went to claims court I had folks who could testify to the conversation my landlord had with my wife. Without these witnesses I would have had a really hard time proving my case. If you don't have anything in writing and nobody witnessed this transaction it is your word against his. The judge than has to decide who is more credible between the two of you. I would chalk it up to one of life's lessons learned.

[cincinnati chili]

It's not libel if it is the truth.

As Yachtzee pretty much said, it doesn't have to be the truth for someone to sue you. Also once defamation is in play, the whole thing transforms from an inexpensive and simple small claims matter to a matter for a higher court where you have to hire a lawyer.

I see this happen a lot. MWM's best two options are to either forget it and put this behind him or to go to court on principle. I think he'll probably win. The bad option (though humorous) is the reign-of-terror-bad-publicity option.

[oneupper]

MarioRijo's problem sounds like something more for Judge Judy.

Forget it, dude. At $300, it was a very cheap lesson. I could tell you stories... (and I'm guessing most of us could, too).

[Brutus]

As Yachtzee pretty much said, it doesn't have to be the truth for someone to sue you. Also once defamation is in play, the whole thing transforms from an inexpensive and simple small claims matter to a matter for a higher court where you have to hire a lawyer.

I see this happen a lot. MWM's best two options are to either forget it and put this behind him or to go to court on principle. I think he'll probably win. The bad option (though humorous) is the reign-of-terror-bad-publicity option.

100% agree.

Libel is not an open-and-shut case even if you know it to be the truth. You open yourself up to a very nasty lawsuit - costing much more than you could ever hope to gain by getting less than $500 back - by taking the "smear campaign" approach. It might result being the most effective method - but also the most costly.