What would YOU do?
The Creditor – An Accounting Firm who provide accounting and taxation advice. The work done can be disputed. Often is – when a debtor can’t pay their fees – even when the work done is excellent.
The Debtor – They owe $10,000. Want to ‘pay it off” at $1,500 a month. They have a poor payment history with the Accounting Firm.
And, if that new contract is not honoured, you can sue and you will win judgement every time?)
A recent Case Study
The client (the debtor) said …
Please find attached a receipt for a payment made yesterday ($1500 )
We are able to pay $1500 on the 10th of each month until the account is cleared.
Please let me know if this is acceptable.
We suggested to the Partner …
What do you think? Always paid in the past, albeit slowly.
Her email would’ve been generated by the Solicitors Letter of Demand sent late last month.
I suggest yes, AS LONG AS she signs and returns a written agreement I send off to her
(they can’t dispute any work done later if they default) Let me know?
The Partner replied …
Not acceptable. Require full payment immediately.
They are no longer clients and are now with a practice in Sydney.
We wrote back to say …
Your call totally BUT the next stage is to take legal action.
* If we do that, costs are incurred and they can dispute the work done.
* If they DO dispute, you have to justify charges and create documentation to do so.
* More costs and time required.
They may NOT dispute of course – I don’t think they have in the past.
In that case, we sue.
Another option is to go back with a counter offer of $2,000 p/m PROVIDING that they sign a written PAYMENT AGREEMENT which I will prepare and send to them. Chances are we’ll get at least 2 payments out of them, AND, if they ever default on any one instalment, we sue and CANNOT lose because we would sue on the broken Payment Arrangement.
In other words, they CANNOT dispute the work done because we would not be suing them about that, we’d be suing them on the broken NEW contract, the Payment Arrangement.
But this IS your call and I will do whatever you want. Please consider.
The Partner replied
I will take your advice and agree to the Payment Agreement.
Get payment arrangements in writing. Especially if
1 it’s for a large amount.
2 the debtor has a poor or no payment history.