Late Payment Penalty Questions...

Jeremy

Member
Joined
Oct 9, 2006
Messages
3,720
Location
Indiana
Name
Jeremy
1) What is the MAXIMUM AMOUNT I can charge with out getting charged with loan sharking/ usury?
2) How do I ensure they pay it?
3) Do I NEED to send a billing reminder? If I do send it do have to send it BEFORE the payment is delinquent?
4) At what point can I file a lien on the property? Who do I have to contact in order to do that?
 

Jack May

That Kiwi
Joined
Oct 7, 2006
Messages
2,423
Location
Palmerston North, New Zealand
Name
John
Totally irrelevant to you but a point of interest none the less.

I had a few issues with a couple of non payers quite a while back and talked to a few people that do debt collection etc.

They ask not if you have it detailed on your invoice (like 90% do) but if the client was aware of the terms BEFORE they entered into a 'contract' and I use that word loosely, for your services.

A few of them stressed this to me, it's not good enough to just have the T&C's on the back of your invoice but they must read and sign them before any work is commenced.

Sounds like the US aye :x

John
 

Mikey P

Administrator
Joined
Oct 6, 2006
Messages
112,310
Location
The High Chapperal
I got a $50 gift card in the mail yesterday to Trader Joes from a lady who canceled two day's early....


A landlord to to beat all....
 

brchudson

Member
Joined
Jan 5, 2007
Messages
4
As far as legality goes, Indiana does not have a usury limit of interest, but even if so that applies more to loans than invoices so it would be a stretch for someone to prove it.

As with many thing, the issue will come down to DISCLOSURE. Was the customer aware of the charge at the time they entered in to the agreement? Also, is the charge reasonable?

Reasonable will include what your costs are for the customers non payment, what the market rates are for unpaid invoices and are you trying to gain excessive profits. (The legal system is written so only attorneys are supposed to get profits.)

You will typically need to file a notice of intent before placing a lien on the property.

You do not typically need to hire an attorney to place a lien on property, the best source of information on this would be the county assessors office.

As far as making someone pay, that comes down to how much is it worth to you.

You can sue the debtor, obtain a judgment and try to execute on the judgment, but this will have varying degrees of success.

Your options change regarding collections if the work was commercial rather then residential.

Something else you may want to consider is placing the account with a collection agency. Though they will take a % (20-30ish usually) they can be very effective at getting you paid.

A typical service industry late/finance charge I have seen has been about 18% APR (1.5% per month), or a flat fee of $10.00 per month for billing and collections.
 

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