The Attorney General acts on your behalf when you get a bad check. It is a crime. Take all your proof. Sometimes one call from her gets you all your money.You can set up your business so that you only accept cash. You can offer a 5% discount for the inconvenience.
Call them up again and leave a message or letter telling them if they don t make good for the check it s going to collections on specific date. That s all you can do. Some customers end up like this. Just mark it off as bad debts.
your situation is common to business owners, and you must allow in your accounting system for bad debt and the cost for attempting to solve bad debt, and allow yourself several months time before trying to spend any check a person had provided to you (because you too might overdraft your account and there s a cost for overdrafts too which should be listed in your accounting system).As you know, selling products and services are two totally different things and are each handled differently. When there s a product it s a physical thing and it can be returned, charged off, returned to the producer, etc. But with a service the only recourse you have is a contract (and a witness, which is a less strong defense because it ends up bring a he said she said type situation that needs a judge to solve and that will cost you court costs and fees.Basically there are two types of contracts, and that s a written contract between two people that spells out everything that will be done and how the matter will be handled if it is not paid and if it goes into collections. The second way is somewhat like the first but it s done on the estimate and says the same thing. All contracts require a signature of approval by the client/customer.Their signature is saying they agree. If you have a brick and mortar store then people are less likely to fear a contract and they sign willingly (and their purchase is either on a credit card or you have a camera in the store, or they have to show you an ID on which you write their drivers license on their check....this is all your proof of purchase). If you have a small business from home and don t have your business license displayed or your business is in a home where it s not allowed to be by county law or some such where a request for payment from someone could be counter-sued in court and you d be in trouble, then people/customers are less likely to pay or to think you re in a serious business or are seriously in business.When you start a business you need to hire a CPA and an attorney and that needs to be a part of your business costs (and business plan from the start) and when you have those on retainer they will help you when you need things paid for. You then must bill your customers 3 times before you take them to collections, then collections can ask for money 3 times and then it goes to court if no money has come forth. The court document asks that the customer either respond by mail and court form or appear in person with their response. Usually if they want to save their credit they will appear in court and try to make a payment plan or at least give the judge a good excuse (which doesn t go over well). If no plan is made the judge will award you and either you can ask for a garnishment of wages or a judgment (lien put against their property/assets). All of this is a cost of doing business . Although there is a judgment does not mean that person would pay you (after all you ve gone through to get this far). However there is one more step a business owner could take and that is to force the judgment. That takes another filed document in court which gives the sheriff (after the business owner and lawyer have determined what assets that person has) the ability to take the asset, or at the very least to put a lien against that asset which assures that when they sell that item (car, house, boat) that you will get the money they owe you. Here in my state we can also insist that something be cold in order to pay us. As far as I know that s not done often (too much work) but when there s a lien like on a house when that house is sold then the money off the top is given to creditors like relative s business.I ve explained this so that you can provide your relative the information. Otherwise if you show you know more than they do for your own good then they might not ask you to help them out anymore.If the amount owed is not worth the attorneys fees, time away from the business to be in court, cost of filing fees in court, or the biz owner knows the people are down and out and really can t pay, then what s simply done is a charge off on the accounting records. They claim that as a loss on their IRS taxes when they file prior to April 15 of that year.
