COLLECT ON BAD CHECKS -- HELPFUL HINTS -- 2003

FRAMINGHAM ---- A general contractor is doing its job properly and timely. As the final payments draw near, the property owner decides to draw the purse strings tight. It refuses to pay the GC the final $200,000.00 although only a few thousand dollars worth of work is in dispute. The owner rebuffed the GC's many requests for payment of the undisputed amount and refused to sit down to attempt resolving the few remaining differences.

What would you do? The GC called me.

I sued and obtained, ex parte, a $224,000.00 attachment of the deadbeat's money. The owner realized that it wasn't in his best interest to litigate over the few thousand dollars. Facing possible double or treble damages, he caved in. Within a little more than sixty days, my client, the GC, received its $200,000.00.

FRAMINGHAM --- My client rented out equipment to a company. The company stiffed my client for almost $16,000.00. Along the way, the company had made payment with a check drawn on insufficient funds. My client turned the case over to me and I sued. The sheriff had informed me that the company was out of business. After defaulting the company, I obtained a judgment for approximately $19,000.00 including principal, interest and costs. But still no money!

Some attorneys may have given up, closed the file, and forgotten the matter. I don't.

Several months later, I sent the execution to the sheriff to make in-hand service on the deadbeat corporation's president. The president had signed and delivered the bad check thereby, creating a personal liability. Through amicable discussions, and the use of a persuasive sheriff, the debtor's president signed a settlement agreement. Within the agreed upon time, my client received the full amount of the execution, with costs and interest.

Although this doesn't always happen, it could happen for you. Armed with solid paperwork, an aggressive competent collection attorney who knows how to collect debts is a valuable ally in the battle for control of your money.

Signing A Corporate Check Drawn On Insufficient Funds May Create Liability Which You Can Exploit To Recover Payment Of An Otherwise Uncollectable Debt

M.G.L.C 93 Section 40A, makes the person who "makes, draws, utters or delivers a check" drawn on insufficient funds personally liable for that check if the check is not made good within thirty days after receipt of statutory notice. This little known provision is very effective. When dealing with a small company, it is often the principal who signs the checks. If the principal signs a bad check, he or she may face personal liability for payment of the check without ever having signed a personal guaranty. When and how you use its provisions is a matter of personal choice. However, when properly used, this statute can be a very effective collection weapon in your arsenal.

When Is An Attempted Offset A Costly Mistake?

Answer: When the offset is illegal.

Attempting to deduct monies or claim damages ("an offset") from products sold pursuant to one invoice/contract from amounts admittedly due on unrelated invoices/contracts may open a pandora's box. Indeed, absent an offset "under the same contract" as allowed by Section 2-717, of the uniform commercial code, courts have held that refusing to pay sums legally owed in an attempt to gain an unfair negotiating advantage violates the Consumer Protection Act which may entitle you to obtain double or treble damages and to recover your attorneys' fees. See Anthony's Pier Four, Inc. v. HBC Assocs., 583 N.E.2d 806, 821 (Mass. 1991) (conduct in disregard of known contractual arrangements and intended to secure benefits for the breaching party is an unfair act or practice); Pepsi-Cola Metropolitan Bottling Co. v. Checkers, Inc., 754 F.2d 10, 17-19 (1st Cir. 1985) (Chapter 93A violation found where payment withheld as a "wedge" to enhance bargaining power).

You too may be able to use a debtor's improper offset attempt to your advantage like the GC did to help collect its $200,000.00.

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