I was contacted today by a builder; I’ll call him Bob – the builder. He was owed $60,000 by an old business partner; I’ll call him Dave – the debtor. It was the remaining balance of a much larger amount. But … it had been owing since 2001. Some eight years ago! What to do? Where to start?
I’ll tell you what we suggested and will give you the outcome in later postings. I’m as interested as you to see what happens. Although my thoughts about the eventual outcome are at the bottom of this post. Anyway …
Previous action had been spasmodic as Dave (the debtor) had been one of Bob’s friends as well as a business partner. Just “Soft” phone calls, the occasional statement and letter. Certainly not hard to ignore as far as Dave was concerned. Bob had even offered to accept payments over a 6-month period. No urgency for Dave to pay up, so, why would he?
I decided that the first approach at this stage, therefore, would be for Bob to send Dave a formal “last chance” letter from himself. So, the suggested letter’s “chatty”, not formal.
This is the wording …
Remaining Account Balance – $60,000.00
Thanks for your last payment of $10,000 that we received in October.
I am writing to you myself as we do need to come to some sort of arrangement for the payment of this balance. It’s a large amount and it’s been owing for a very long time. As Mary said in her last letter to you back in September, we are not bankers. I’ve only let it go on like this because of our long personal and business relationship.
The balance remaining now stands at $60,000.00.
If you can’t pay it all right now, then I’d be prepared to accept a payment of $10,000 per month for the next six (6) months as follows:-
Amount ——————– To be received by
$10,000.00 —————- Friday, 30 January 2009
$10,000.00 —————- Friday, 27 February2009
$10,000.00—————- Friday, 27 March 2009
$10,000.00—————- Friday, 24 April 2009
$10,000.00—————- Friday, 29 May 2009
$10,000.00—————- Friday, 26 June 2009
Considering that the balance is now overdue since 2001, this would seem to be a more than fair arrangement.
- If you want to take up this final offer, just sign and return the enclosed copy of this letter and send the instalments so that I receive them by dates above.
- If you can settle it now in full, tremendous.
- If you can’t and this arrangement is not acceptable, please phone me by 2.00pm of Tuesday next week (20 January) so that we can sort something else out.
Dave, I need to be very clear about this. If I don’t hear from you I will be left with no alternative but to take alternate action. Let me know what you want to do.
—————————————————-Excerpt from my email to Bob
* Include a stamped, self-addressed envelope and a copy of the letter with the above letter. Put this at the bottom of the copy of the letter.
I, Dave Debtor, agree to the above payment arrangement.
Signed By: ——————dated:
Dave Debtor —————-___ January 2009
* Send it by REGISTERED MAIL – Alter the amounts if you like, but this letter is the first firm, “I mean it this time” one.
* Does Dave have an email address? If so, send a copy there as well as long as you’re sure that only he will get to it.
* Does he have a fax? Same thing.
I don’t expect him to sign and return this letter. I want to show him that you mean business. (Hence, the registered mail, email, fax, signed copy, firm dates, self-addressed envelope, etc.) I am trying to establish his intent. If he calls, you should “hold your ground”. If he doesn’t respond to the letter, we will contact him (with your permission to do so first) as your “Business Consultants” either by phone, sms or letter (still your letterhead) to find out what he intends doing.
—————————————————-STEP THREE (and more if required)
Totally depends upon the outcome of Step Two.
Dear Reader, I’ll keep you posted! Promise.
Until next time,