How Do You Deal With Clients That Won’t Pay?

March 30th, 2016

3rdParyViolationKaren says:

Have you ever heard of a photographer placing a lien on a property where payment was not received?  I recently did a full-day video shoot which required days of editing and has not been paid for because of a bad check.  The shoot was a large scale project for a multi-million dollar property.  Is it possible to place a lien on a property?  Are there any contacts you might have for legal advice?

First of all placing a lien on property requires a Judgement. That is, you have to get a judge to decide to place a lien on the property. This means you may need to pay a local  attorney to help you through the process.

My guess is that the first thing a judge will ask is what have you done to get payment from this person? That is, the judge would want to be sure that the person owing you money is refusing to pay you. My advice would be:

  1. Establish that this person is in fact ,refusing to pay you. Have you talked to them personally? Or are you just reacting to getting a bad check? This person may just be sloppy with their business affairs.
  2. If in fact this person is refusing to pay you for some reason. See if there’s something you can do to fix their issue… do they not like the video… is there some way you can you remedy the client’s issue?
  3. If you’ve tried to remedy the problem that’s driving their non-payment and can’t reasonably fix the problem. Talk to a lawyer. What will it cost to get a legal solution?
  4. Decide if it’s worth it. It may be best to just walk away.

Your situation is and example of why it’s risky to invest multiple days on a project for someone that you have not established as trustworthy without some upfront partial payment.

Has anyone been stiffed by a client like Karen and how did you handle it?

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20 Responses to “How Do You Deal With Clients That Won’t Pay?”

  • Bottom line, new agents pay at the time of shoot, not after they get the photos, not after they sell the property, not when they feel like it and certainly not with a bad check……

    After years of service, the only sure thing you can expect is that there are going to be some scum bags that burn you IF you let them. I have a short list of agents that over the years have tried to burn me and I pass that on to the new agents that question why I demand full payment at the time of shoot. “Love to extend you the courtesy of paying later, but among other things, some of your fellow agents have been less than ethical and have now ruined it for all the agents” Once we have established a relationship, we can explore some other options.

    The fact of the matter Karen is that you need only file a small claims case against the agent for the bad check. In my state, someone found presenting bad checks can be liable for up to three times the amount. Your case would be that they gave you a check, it was denied and you want it to be made right. Nothing about you, your service, your product, etc. Once they presented the check, they are on the hook. They can not come back later and say I changed my mind.

  • Small claims court. Don’t need to hire a lawyer. I had an agent do the same to me a few years ago. Just went to the court house, filled out the papers and the judge ordered the agent to pay up. After the judge order him to pay up, he still did not pay. I went back to the judge and the judge garnished his pay. The broker then had to take it out of his next commission check. I got a check from the broker. Ending up costing the agent for what he owed me, the fee for several sheriff trips and court cost. He paired a hefty price. Did not cost me anything, just my wife’s time at the court house. I now make all agents pay in advance except for the ones I have been doing business with for years. If they can not meet me at the listing, I will go ahead and take the photos and send them a Square or Paypal invoice when I get home. Only after I receive an email that they paid will I process the photos and build the tour.

  • Every state is different. In Massachusetts no judgement or court order is required, simply an affidavit filed with the County Registrar of Deeds.
    If they are displaying any of your work you can send a DMCA letter to their hosting ISP and get the work removed from the website. I did this for an unpaid $600 invoice and that really got the senior management’s attention fast. Paid and DMCA rescinded in one day.

  • If they are using your photos on the MLS, you can write the MLS and have them removed. Threatening to do this is usually enough to get their attention.

  • Sorry to hear of your problems. I have a policy for video projects; 50% on approval of proposal, 25% day of the shoot, 25% prior to release of video. Never release anything without payment. I also learnt this the hard way.

    Hopefully you will get a good solution to this problem.

  • I just had something similar happened. The final payment of $875 is out.

    First off, if you have a contract that specifies liens or payments or rights, you are in a much better position than if you have NO contract. If they are using your photos or video that you created, you can try to sue for copyright infringement. But first you have to send a certified letter informing them of copyright infringement with a timeline for their action. If you want to take them to court, you don’t need to hire a lawyer if the claim is less than $5000 (in Florida). They call this small claims court, though small claims court isn’t a place.

    Find a copyright lawyer and see if they will talk to you without charging you a “consultation fee.”

  • This has happened to me a few times over the years. Just call the bank the check is drawn on every single day and tell them you have a check drawn on account number “xyz123” in the amount of $xxx and are the funds available for this check to clear. It may take you a few weeks but there will be a day that the funds will be there unless they have closed the account. When the funds are available, drive your butt to the bank and cash that check! I actually had a client do that to me and weeks later after I got the check cashed threatened to sue me because they bounced a handful of other checks because I cashed theirs. Seriously!

    If that doesn’t work, small claims court would be the best solution so long as it’s not over a certain $$$$ amount. In NY state, it’s $3000 in town court and $5000 in city court. I recently went through the process. It was a pain in the arse. Lots of forms to complete, fees outlaid on my part and months of waiting. I won my judgment, but the judge would not reimburse any costs incurred to me such as all of the small claims court fees, bounced check fees and parking fees (believe it or not). But that’s a NYS thing…. I still got 95% of the money.

    I would strongly recommend you document all of your communications with the scum bag not paying you in the form of contracts / certified letters if possible. My judge allowed emails too.

    The more documentation you have that shows:
    1. you both agreed on a price and service
    2. you did the job agreed to
    3. the client received the product
    4. bank records that the check bounced how ever many times
    5. and all communications in trying to recover the funds

    will bode much better for you in court.

    Best of luck to you!

  • Can you find out who the closing agent will be? That’s their Achilles heel.

  • My first thought upon reading that was: a full day video shoot with “days” of editing?

    I have to wonder if they had any idea how high that bill was going to be?

    I work on multi-million dollar homes all the time, but I could never get away with billing them for that much time. A full day maybe, but not 3.

  • Getting the judgment does not mean you are going to get paid. In Missouri the creditor is going to have to collect it, the court is not going to. You may be able to get the Sheriff to seize assets, check with your locale.
    Good luck

  • @Rohnn,

    Correct, but if you get a judgement, you immediately sell it to a collections agency for eighty cents on the dollar. Trying to do the collections yourself, especially for a relatively small amount, is more time consuming than it’s worth. The collections agencies will be soliciting the plaintiff within days if not hours of the judgement.

  • Can we have more details about Karen’s dilemma, please? Otherwise, we may be giving inappropriate advice.

    Was there a contract?
    What was the agreed upon cost?
    Was this the seller’s or agent’s bounced check?
    What were the follow up steps?
    Which Country or State?

    Etc., etc., etc…

  • I have absolutely no idea why there’s a random video of light bulbs in my previous comment….apparently the internet thinks my comment was “illuminating”….

  • @Scott – I just looked at the text of the message and I can’t see why it’s there either. I’ll work on getting rid of it.

    Got it fixed. It was the number eighty that was doing it… can’t exlpain why.

  • @Dean – I just told Karen about all the great feedback and advice she’s getting and I let her answer your questions.

  • I thought it was a felony to pass a bad check, threat of arrest may work. A client did this back in the 1970’s to collect on a large check used for a car purchase: Went to the deadbeats bank manager and discovered that the check would have cleared, but the account was about $300 light. He made a cash deposit in the deadbeats account and the bank then cashed the formerly bad check.

  • Larry gives some great advice here—if it was in fact a simple mistake and the client does intend to pay, there are multiple ways to de-escalate and resolve the issue amicably (although I would require a credit card or certified funds for future work). That said, if you are unable to establish communication or you are certain that the client is failing or refusing to pay, a well-written demand letter is a good first step (there are many templates online that can serve as a starting point). Personally, unless your contract provides specific provisions for what happens to the client’s usage license to your copyrighted content in the event of nonpayment, I would be hesitant to remove the content from your hosted server (or to issue a DMCA notice if hosted on the client’s site). Look at it this way—if it does end up in court, and the property has sold by then, you can show the judge that the client’s usage of your content played a pivotal role in predicating the sale of the property.

    Although I’m not an attorney, I spent four years as a garnishment supervisor at a collections law firm that handled cases in Kansas and Missouri, so at least for those two states, am intimately familiar with the process. I’m not intending to give legal advice here (necessary disclaimer), but in reference to your question about a lien, I don’t believe you can place a lien on property that your client doesn’t own. If the person paying you is the agent and not the seller, then you wouldn’t have a judgment against the seller and therefore couldn’t lien their property (you could, however, potentially get a lien on any real property your client owns). Should you need to go the legal route, in most states once you have a judgment you can simply issue a garnishment/execution to the bank on which the check was drawn—the bank freezes all checking/savings accounts belonging to that entity for up to 30 days. That is usually enough to result in a phone call and the client may agree to pay the full balance (in certified funds) to have the garnishment released, since any other checks they’ve written will bounce due to the garnishment. Otherwise, whatever’s in the account, up to the balance in full, will generally be mailed to you or the court (for distribution to you).

    I say all this so that you know the process is fairly straightforward; however, it depends on how busy you are. Obviously our time is much better spent creating content for paying clients than chasing down non-payers, so if you can find a collection agency as Scott suggested, the approx. 20% contingency fee they would charge is so worth it to free up your time.

  • Follow-up — I’m not sure why there is a Radiohead Vimeo video embedded in my previous post. I’m assuming it’s the same issue Scott had with the light bulb!

  • To get a lien on a home, you have to have performed physical work on the property as a contractor. So a house cleaner isn’t able to file for a lean and neither can a caterer providing food for a party.

    The story is a bit thin. Did you contact the person that wrote the check to demand payment? Are they avoiding you or have they stated that they don’t intend to make good on the payment due? Remedies vary by state, but it’s not hard to get a ruling against somebody. Your main object is to get paid, so RJ’s advice about calling or stopping by their bank frequently to swoop in on available funds is good advice if you have the time and it’s a local branch.

    To file in court, you need to have deposited the check and have had it returned unpaid with all of the graffiti the banks put on it to show that it’s been through the system. You will want to have your statement showing what your bank charged you for the returned check and if you have a statement on your invoice that you charge interest for late payments, make copies of that as well. Filing in small claims court is not very hard and the forms can often be found online. The biggest hassle is waiting for your case to be called on the scheduled court day. The actual process should be very fast once you are before the judge. If the person doesn’t show up, you will get a default judgement, but they don’t have a chance with a bad check. Many states have a 3x amount penalty that you should look into to see if your situation qualifies and what you have to do to make sure that any judgement will allow for that. I’ve heard, in California, that getting 3x the amount of the check is tricky and can’t be done after you have filed.

    Not getting paid for 4 days of work always hurts, but hopefully you can get this resolved quickly. It’s easy to see why many of us require payment at the time of the shoot or before images are delivered. Trying to collect on bad debts of a few hundred dollars is more work than it’s worth.

  • Check with your local law enforcement.

    This is a link for Fairfax County, Virginia.

    http://www.fairfaxcounty.gov/police/crime/bad-checks.htm

    It states that over $200 is Grand Larceny, a felony and if a warrant was implemented, the check writer would be arrested like any other criminal. I would imagine that all jurisdictions would follow a similar rule of law. I doubt if any bad check writer would want to take a chance by continuing to stiff you. Don’t take a partial payment, I’m told that the writer is not liable for the rest of the amount.

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