How to Recover $35,000 After Client's Bounced Check for Warehouse Redesign Project

I just finished a complete redesign of a clients warehouse. He needed to add in additional cooling units for a server farm he started. He had been paying me, all be it very slowly and his last check bounced. Right now he owes me about 35000. I talked to my lawyer but its going to cost me 5 to 10 grand to sue him. I really dont have the time or money to do this now. Can anyone help me. I am out 25k in materials alone on this phase!!!!!!!!!!

Hi Anthony,
First, I hope you have a signed, written contract that spells out the work you were doing and the payment terms. If not, it makes things harder, but I will still give you the same advice-- your chances of succeeding just drop a little.My suggestion is to write a letter to the client stating that they owe you money and you would prefer not to take legal action, but you will if necessary. Give them a specific date that they need to pay by, typically two weeks. Do not leave it up in the air--always give specific dates--and do not give them too much time. Wait a week after that date and if they haven't paid you, hire a lawyer to write a similar letter. They will take this one more seriously. If they don't pay you within a week after the date set by the second letter, file a lawsuit. It will cost one or two thousand dollars, but that will most likely start a conversation with the deadbeat client. If they still won't pay, and you can't work out a payment agreement with them, you should discuss next steps with the lawyer. The client will need to spend money on a lawyer to respond to the lawsuit, which they won't want to do. Your lawyer should continue to contact the client regularly to explain how they will incur legal costs and damages in addition to what they owe you, so they are better off paying now.

If the client still refuses to negotiate, you will need to consider whether to continue with the lawsuit. The lawyer can help you decide. I've never had a client refuse to pay once a lawsuit is filed. They have much more to lose at that time.You can also take the client to small claims court but 1) you can only recover a fraction of what they owe you, 2) you'll need to take much more time to prepare, and 3) not knowing the law could cause you to lose on a technicality. It's not the optimal choice for such a large amount of money owed to you.Whatever you do, I suggest you do something. Not doing anything means you lose money, and you set a precedent when other clients don't want to pay. I'm proud that in my nearly 30 years of consulting, I've only had one client who didn't pay their full bill after I took the steps outlined above.Good luck!
-Bob Zeidman

Anthony
Way back in South Africa I saw a lawyer use a technique that was little known. The banks had an option where you could deposit a cheque "on hold" (I think that it what is was called, or maybe "on collection"). The bank would monitor the payer's account (even if it was different bank) until there were funds and then immediately submit the cheque. Of course that requires  that there is a cash flow. And of course the banking system must allow for it in your part of the world, so check (see- now there is no confusion) with your bank.

You may find that debt collectors are cheaper than lawyers, though that is open to question.  They can use some pretty strong arm tactics and might be an intermediate option (between your own efforts and getting lawyers in).