Turning in work and not getting paid for it is a pretty depressing part of freelancing. If you’re owed a substantial sum and have a bit of spare time, it’s often useful to pursue payment rather than just giving up. About three years ago, I wrote a long post about taking a client to small claims court and winning, but I wanted to put together a nuts and bolts how-to piece for those of you who don’t want to read about the details of my experience. Here it is.
(Disclaimer: each state small claims court system is different, and this is just based on my experience in Minnesota. However, there will likely be similarities.)
An Ounce of Prevention…
You can’t always avoid deadbeat clients, but getting contracts in writing can be really really helpful if things ever end up in court. (However, I did win my case with just a verbal contract, so it’s not impossible.) Even with a contract, you may consider asking for partial or full payment upfront if it makes sense for the type of work you do. Last but not least, don’t be afraid to walk away from a client if there are red flags. I personally will turn down work from a client if they spend too much time badmouthing the last writer they had. I’ll also literally get up and walk out of a meeting if the client is rude to their sysadmin or tech support person. The deadbeat client I beat in court was screaming about new bugs every few minutes in our five-hour planning meeting that should’ve taken an hour max. It probably shouldn’t have taken me that long to realize that if someone is super nice to me but a raging asshat to their tech guy, he’s probably not a nice person or one worth trying to work for.
The ‘Pay Or Die’ Letter
Often sending a certified letter to a deadbeat client letting them know that you’ll be taking further action if necessary will trigger payment. I like Kelly James-Enger’s template. The important part is to set a firm deadline of when you will take payment to collections and to follow through.
Some organizations, such as the National Writers Union and ASJA, will sometimes negotiate with a client on your behalf if you are a member. This is often ineffective, as all they do is send strongly worded letters and sometimes threaten to out clients publicly, but if you are already a member, it might be worth it. Paying for membership for this service, on the other hand, may not be.
Small Claims vs. Collections
If you have a contract and the client doesn’t dispute the fact that they owe you money, you can try to go to collections instead of small claims court. Or, you may need to send a client to collections at some point after a judgement is rendered. I like CashIn Usa, which is affordable even for small sums… but of course they do keep a percentage of payment received.
Going to Court
You should be able to find a local small claims court website in your area with instructions on what to do. Typically you just have to fill out a claim and pay a small fee, which may get added to the claim, and then the court takes it from there. Just make sure they amount you are seeking is below the maximum allowed amount you can go to small claims court for.
Settling out of Court
Once a court date is set, some clients will settle outside of court. It may be worth considering if you’re comfortable with the amount offered, depending on the circumstances. Of course, some debtors never make an offer.
First you’ll want to gather evidence for each claim you intend to make. This could include contracts, copies of work completed, emails and texts about meetings, correspondence about the actual dispute, invoices, past due notices, and so forth. Often you need to make copies for the judge and for the deadbeat client as well as one for yourself.
Write your case out, summarize it on an index card, and practice it a few times in front of a friend. It helps. Judges also really value clear, logical thinking so try not to jump into tangents about peripherally related issues or getting too emotional. Just the facts, ma’am.
Look this up–it means that your client owes you the amount due for work performed, when he or she cancels the project before it is completed. See if there are any local laws referencing this that you can refer to during your case. It’s not absolutely necessary, but can sometimes help.
Look up the fee for these, if relevant–it sometimes includes a witness fee, a fee per person, and travel expenses, as well as filling out an affidavit and signing it before a notary. Keep this in mind when calculating cost and time to determine whether you want to go to court. You don’t want to spend more than you are trying to gain.
I brought my now-husband with me to court, which helped me relax a bit. I also felt like trying to get the money owed to me was worthwhile in and of itself, even if I had lost. This helped, but the process was still nerve-wracking, especially because I felt like an imposter wearing my pearls and suit. Sometimes seeing the debtor will make you feel a bit frazzled, too. This is when your index card with the points you want to make will come in handy. Just be aware that you may not get the results that very day, and even if you win, there’s a small chance that your client may want to appeal to district court. For the most part, this is more trouble (and money) than it’s worth.
You don’t always get your money right away after winning in court. There is a process you most go through. Typically you need to get the judgement transcribed to the district court, which puts a lien on the client’s property. After that, you can try to obtain bank accounts or other information to help aid in collection. If you can’t access it, you can often file an Order for Disclosure, requiring the debtor to disclose his assets. There is a small fee associated with this (I paid $5 per mailing and had it sent to both a business and a home address). In Minnesota, if the form is not received back within a certain time period, you can fill out an Affidavit in Support of an Order to Show Cause. This would require the debtor to appear in court to fill out the form (or explain why he couldn’t fill it out). There is another fee for the County Sheriff to serve the order. If this doesn’t work, you can ask the judge to issue an order for a Writ of Attachment, a warrant for the debtor’s arrest for civil contempt of court. It costs another $55 and again, there is no guarantee that it will work if the debtor isn’t arrested or detained for another reason. In that case, they’ll have to fill out the form before being released.
If the form is filled out, or if you find the debtor’s assets (bank account, employment, etc.), you can often either put a levy on the bank account or garnish the debtor’s wages. In Minnesota, you need to pay $55 for a Writ of Execution for this. It is served by the Sheriff of the county where the debtor works or bank account is located. Having the papers served is an additional fee, and garnishing wages requires an additional form, a ten-day notice of intent to garnish. That needs to be served via certified mail (an additional fee). The good news is that any collection fees paid to the Court or Sheriff’s Office by the judgement creditor are added to the judgement and owed by the debtor–but again, there is no guarantee they will get paid.
Is It Worth It?
Although the process is time-consuming, it can also be–dare I say it?-kind of fun. In my situation, I was seeking $845 and $75 in court fees. The judge ruled that I would receive $500 and $75 in court fees. I also spent an additional $55 for the transcript of judgement, order of disclosure, and paperwork to file a partial satisfaction of judgement. At that point, I was going to drop the matter because it costs $55 to pursue wage garnishment in Minnesota, and spending $55 to try to get $55 didn’t make sense. However, I got the remaining $55 from the deadbeat client’s company from the new owners after he was ousted as CEO.
Small claims was worth it for me because I actually enjoyed the process and got $500 out of it, and because getting payment from a terrible client was personally satisfying. (I also ended up making a lot of friends with people who’d heard about the case and had their own bad experiences with the guy, so having cool people know my name at events and get really excited about meeting me was an added bonus.) I can’t say whether it’d be worth it for you, but hopefully understanding the process a little better can help you make a good decision.
- National Writers Union Grievance Assistance
- ASJA Grievance Self-Help
- Writers Weekly Whispers and Warnings
- 5 Ways To Avoid Getting Stiffed
Leave ’em in the comments. (They’re moderated, but I’ll approve them as fast as I can.)