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Squeaky Wheel Gets the Grease

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If you have a small business, perhaps a construction company or material supplier, you know what it's like to provide your services or deliver your materials and then not get paid. It's frustrating. You paid your employees. You paid your suppliers. Why can't you get paid? You know the person or company that owes the money is still doing business. The debtor is receiving money, there just not giving any to you. Why?

Let's assume that the person or business that owes you money is still in business, they are making money, maybe even a profit. The problem is that once they have what they need from you, the motivation to pay is gone. We all know you don't pay the painter the full amount before he finishes painting your house, it will take him forever to finishing the job. No motivation. The same works in reverse. After the job is completed or the materials delivered, there is no longer an urgency to get you paid.

There is an old saying that says "the squeaky wheel gets the grease". The relevant translation is that that people will use their available resources to deal with the most urgent matter. Therefore, if you are owed money and the person or company that owes you the money simply won't pay, or even if they indicate that they cannot pay, you have to make some noise. You have to become urgent.

Collection agencies can make some noise, they threaten to damage credit ratings and they threaten to turn it over to an attorney for collection. News flash! If the person is not paying you as agreed, they are probably not overly concerned with their credit rating. Also, think about it, did you really check and scrutinize their credit before you provided the services or materials? Also, when the collection company tells them that it will be reported to the credit agencies if payment is not made immediately, the debtor is probably thinking, great, they have not reported it yet. I have more time. The collection agency will also say that if payment is not received we will turn it over to an attorney for collection through a law suit. The debtor will then be thinking, great, they have not turned it over to an attorney yet, I have more time. Translation: although the collection agency can make some noise, they are not the loudest wheel, and you have not yet become urgent. You have not squeaked loud enough.

If you want to become urgent, if you want to be first in line to get paid, you need to skip the intermediate steps and directly hire a collection attorney. The fees charged by a commercial collection attorney are generally no more than you would pay a "collection company", to send letters. An attorney, however, can actually provide legal advice and file a lawsuit. Filing a lawsuit immediately makes you urgent.

Kevin J. Pratt
Attorney At Law

 

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