bob – the builder (part 1)

Home/case studies/bob – the builder (part 1)

bob – the builder (part 1)

this is part 1 of a live Case Study. click on the picture for the full storyI 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 …


Dear Dave,

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
—————- Friday, 27 March 2009
—————- Friday, 24 April 2009
—————- Friday, 29 May 2009
—————- 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.

—————————————————-STEP TWO
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,
Michael Todd.

By | 2017-09-20T13:17:48+00:00 January 14th, 2009|case studies|2 Comments

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.


  1. Anonymous August 22, 2011 at 5:55 pm - Reply

    I am interested in the outcome also. I personally have a similar situation, and I would like to use the technique you provide here. if it is all right to you.

    how about Dave completely ignores the letter, would you take him to the court? the small claim court limited to 7K in California. you might end of a big legal fee if you do take the action.

  2. michael todd August 22, 2011 at 11:46 pm - Reply

    Hi Anonymous!
    Thanks for commenting.

    We have never taken this debtor to court. As you say, it wouldn’t be cost effective. We used “bluff”, ‘fear of the unkbown’; this debtor didn’t know how far we’d go, what we’d do to collect. Please read all posts in this series of bob-the-builder to see the eventual outcome … almost ALL is now paid!

Leave A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.