Posted by doctorhandshake 9 hours ago
Honestly, this seems to be bad advice from their recovery services. Suing is 100% recommended here. There are plenty of lawyers that will work on a pro rata basis for account recovery in California. Sure, you lose a portion of your 35k; but you get more than you would have letting them get away with paying zero.
There's also laws in place to keep companies from "closing up shop" and opening in a new entity. It doesn't necessarily erase your debt (it can, but only in rare circumstances). And, even if they do get around it, it keeps them from pulling the same shenanigans going forward, in the state.
If they try to dissolve and create another business that operates in the same sphere/as a successor or with the same management team; the debt doesn't disappear, you just prosecute the new entity. With an added cherry of potential criminal prosecution, if they're particularly egregious about it.
People can 100% get around paying, that happens. But the judgement will remain on their record. This will make reincorporation difficult as well as just acting as a warning to future partners that do basic due diligence.
No one's saying it's easy to get the money back, but rolling over probably is the least desirable outcome (and probably why they've acted this way with so many people).
As to your collection firms, I can't speak to it. Maybe your situation is more complicated (e.g. registered entity out of state, unclear contract terms, etc) or they just don't want to go through with the hassle of doing more than they were hired to do (send nag letters and hope for easy turnover).
In the future, you can use it as a learning experience. Keep your deliverables under the small claims limit, do metered payouts, etc.
Early/frequent payment terms are always good to have but you may not always have the leverage for it depending on where you’re at as a contractor.
Takes getting ripped off a times before insisting on better terms I guess. It’s like bombing your first job interview… you can prepare but it just needs to happen.
Has saved me from wasting my time on loads of projects before.
Reading the thread, I think most of us who have worked contracts here have been burned one way or another
That way your “discounted” rate is the rate they should have paid and they feel like they got a deal.
And TBH, I have also had a few false positives. One contract I did not take (it was for a mix of equity and cash) turned into a 10B+ company, and I would have made enough to retire (again) on it over a 1-year contract. I didn't because the founder who called me just sounded completely clueless and was barraging me with marketing speak instead of explaining what he needed. I was so exhausted from his BS I just decided I didn't need the headache. (This is also a danger of having enough to retire ... you turn down a lot of potentially lucrative work because you just don't think the headaches are worth it).
In the grand scheme of things, other than that one big missed opportunity, I haven't missed too much upside by being so picky. And when I'm counseling colleagues about their unpaid contracts and conflicts, I'm always silently thanking the stars I have the luxury to say no. I know that's a priviledge.
99 out 100 times they will be a hassle, and you'll be lucky if they pay you anything beyond the upfront payment.
Even worse if it is another business, as the author writes, those can just declare bankruptcy and walk away.
And yet, somehow, you gave them the most important time you had for their promises.
This wasn't because of the customer or not getting paid. This was the author's choice.
My SO has her own story - she ran into a guy whom she later found out does it as a policy: hires people, never pays, threatens to sue them if they publish their story. Her lawyer told her to just forget about it.
It's then that find out the limitations of our legal system: if the client is international, forget about it. If they're out of state, prepare to deal with an expensive legal process taking place where the laws may not always favor you. And even if it's local, and you won in a small claims court - good luck collecting.
I have periodic payments built into all my contracts, with the final payment taking place after acceptance tests, but before me surrendering all materials and code. I won't say this is a 100% bulletproof solution, but the alternatives suck.
While these statements are generally true, it shouldn't dissuade anyone from pursuing these remedies.
Years back I took a small programming contract with a 'friend of a friend' that ended with me delivering what was asked and them suddenly not having any money, claiming the company was going under.
They were in another state. I filed small claims by mail and they never responded, so I got a default judgement without ever needing to travel, for under $500 in total fees. The judgement is worthless though, right? Probably...
Fast forward about a month and they had an investor willing to float the company for a while longer, but now my judgement is a giant wrench - the investor won't give them money as long as this is hanging around. I got the cofounders to jointly take on the debt personally (after consulting with a lawyer that this was possible - he didn't even charge for the consult!) and I vacated the judgement against the LLC.
A short while later the LLC went under anyway, but since I had both founders' personal finances under my thumb (which would allow garnishing wages, obtaining leins, etc.) I was able to recoup the entire contract amount from them personally.
I wouldn't have spent more than about $1,000 chasing that money down, but a few hours of paperwork and a few hundred dollars ended up making it easily worth my while.
I get what the author is saying here. But it's a bad idea to treat one's work team with deep communal devotion in this way, as if they are a kind of dysfunctional family-- or, in the author's case, apparently higher in status than real family.
Doing this without proper remuneration creates a market distortion, and that is bad for capitalism.