Author Topic: How to get a client to pay? Or: do I need a private detective/lawyer?  (Read 1984 times)

mathstach

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I sometimes do private tutoring for self-employment income in NYC. Sole proprietorship, zero prior experience with lawyers.

One client has not paid me for some tutoring I did---the payment is now more than three months overdue.

I'm embarrassed, and confused about how to respond appropriately to this.

Do you think I should do something? Or forget about this and move on? Would you need more information to offer an opinion?

My living stipend as an NYU PhD student is small, so this type of income normally helps me a lot in saving.

Anyway, it occasionally happens that I get a wealthier client---sometimes they have an unusual preferred payment method, but as long as they're prompt in paying and honest, it's all the same to me.

More info about this particular client:
In the Fall 2017 semester, this client was an NYU student, and emailed a listserv to find a private tutor. I responded, and we began private tutoring sessions. The student was apparently from Spain.

Sessions tended to be effective in meeting the students' goals; although the student did seem to put in less work in between sessions than average.

Initially, the student paid me in cash after each session. The student never had cash on him, and I always had to accompany him to an ATM in order to be paid.

One time, the ATM refused to give him money, and he said that he believed he had withdrawn too much that day.
(I believe this to be true; the student appeared to me to live an astonishingly expensive lifestyle.)

I decided to request that he pay me as soon as he could. He paid me that Friday, and tutoring resumed.
When a similar thing happened again, he paid me an additional Friday.

We agreed to have payments on Friday, instead of after every tutoring session, as I wished to continue to help the student, and was tired of going to ATMs fruitlessly.

After a couple of weeks of this (regular weekly payments), the student's sister came to visit; she was a bit older, and said she worked in real estate in Spain.

To make a long story short, the student and his sister indicated that they wanted to have one of their relatives wire me a single payment for whatever tutoring costs were incurred between that day and the student's midterm exams (late October).

I was reluctant. After some additional time, apparent building up of trust, and continued regular payments, I agreed.

So the midterm came and went. The student asked for an invoice, I made one, and the student said the wire was sent.

I waited an appropriate amount of time. No wire. The student was surprised by this, and said he would talk to his relatives in Spain.

Eventually, about twenty days into November, I received an email from a relative of the student. This relative said that some other relative had gotten some detail of the original wire wrong, and that he had now sent the wire correctly. The email address he used indicated a work email associated with Aras Capital, and the email sender was called Hugo Linares Espinos.

After this, the student wanted a couple of additional tutoring sessions. I said I needed to receive the wire first; the student's mother called me and said that she had given the student enough money to pay me in cash for these additional sessions and apologized for what had gone wrong with the wire.

Anyway, I did those sessions, the student was able to pay me cash after each (following walking trips to ATMs), and after Thanksgiving, the wire finally arrived and the money I was wired was sufficient to pay me for my October work.

The student asked me to continue the private tutoring, and said a second wire could be sent in mid-December. I was reluctant, but the mother made a persuasive phone call and I felt it would benefit the student academically; he had taken leave from school the prior semester, and did struggle with certain topics. Finally, I agreed.

I did the tutoring in December. In mid-December, the mother traveled to NYC and cooked for the student for the whole last week of the semester. She said that I should email her an invoice, and Hugo Linares Espinos would send me a second wire for the agreed-upon amount of money. She acknowledged the receipt of the invoice verbally after I sent it to her.

The semester ended; I traveled to visit relatives. On December 26, I received a phone call from the student in the midst of a family function that required my attention; I could not answer it. When, at a later date, I tried to call and text the student's phone number, I found it no longer worked, according to an operator in Spain. Calls/texts to the mom's phone number, emails to the student's NYU email address, emails to the mother's email address, and emails to Hugo's email address receive no replies.

Hugo Linares Espinos is the name of a real person who works at Aras Capital, and he is part of a family close to former King of Spain, Juan Carlos. He's been featured in Spanish-language magazines which focus on celebrities, e.g., Revista Vanity Fair. When I've spoken to a couple of other NYU people that met this student, they say they'd expect members of this family to change their contact information---possibly both phone and email information---regularly.

The amount of money that was supposed to be in the second wire would probably not sound large to many of you, but is an amount equal to 12.5% of my annual living stipend, so it would be wonderful if it were ever to be paid to me. It would also be psychologically satisfying, and provide closure, if I received some statement saying that the family will not pay (not financially satisfying, however).

As a Mustachian, I can handle this loss. Also, I am reluctant to pay a private detective or a lawyer to help me, especially since hiring such a person in no way guarantees that the party in question, once found, would actually pay up.

Yet, I can't help wondering if there might be something else I should do.

Advice? Anyone else ever had a similar self-employment challenge with getting a client to pay?

Scrapr

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #1 on: March 25, 2018, 11:44:12 AM »
You've been had. Do your best on the Google fu but spend no money on tracking him down. You're in a hard spot as services have been rendered and now it's difficult to collect.

look at the NYU student roster every term. But the guy likely has flunked out

sucks.

bwall

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #2 on: March 25, 2018, 12:13:41 PM »
Here are my thoughts:

1) He knows how to contact you, but hasn't. Which means,

2) He's disappeared, for reasons best known to him. Which means,

3) No money is likely to come.

BTW: Europeans know how to make wires. A 'mistake' on a wire transform for them is like a 'mistake' when writing a check here in the USA. They were stringing you along the whole time. He knew the entire time that he'd not be paying the bill, so of course he was 'surprised' that the wire hadn't gone out.

What you chose to do now will determine what you benefit from this event. You have two choices:

1) Do nothing. By doing nothing, you get no money and no experience, other than being walked on and being a victim in the classic sense of the word.

2) Track him down. You may not collect, buy you will gain a lot of experience in how people are and how the world works. This could be very useful experience that you look back on for the rest of your life. It could be a great story to tell the kids and grandkids.

You do still have some leverage, so you have to use it. The time for being nice is over. I would suggest the following:

A) Contact NYU. Make a formal complaint to the department where he studied, or his contacts. How was he admitted to NYU? Direct application or through a program? Did he take English language classes the year before enrollment? Check at the English as Second Language dep't. Or was he also a PhD. student? Find his co-workers/professor there and tell them very concisely that he owes you $X and you need to get in touch with him. Maybe they can contact him and let him know that you are looking for him? Say you might be forced to go to the police, but you don't want to, all you want is your money. Appear calm, rational, yet dead serious. This is your best case scenario; you can potentially poison his contacts in the USA and thus negate a huge side-benefit for his studies in the USA.

B) If 'A' doesn't work, go to the police and make report. Put it on the record. Get a copy of the report once it's finished.

C) With that report, contact the American embassy in his home country, Spain. File a complaint there. They won't do anything as they aren't debt collectors. But, the next time he needs to get his entry docs for the USA filled out, he might have a problem. Europeans who are members of the upper class (as you suggest), want to be able to travel freely to the USA, if nothing more than to shop and go on vacation every few years or so. He'd have a hard time explaining why he can't go on a family vacation.

D) While doing A & B, try and find as many people in Spain who know him, start with Facebook. Tell them in simple English who you are looking for any why. Tell them that you might have to contact the American embassy and file a complaint if there is no resolution. Continue by saying that he'll never be allowed back in the USA, you don't want to do this, but you have no choice. He has forced you to do this. Maybe they can help?

Don't waste money on lawyers or private detectives. You'll be "throwing good money after bad".

Keep us posted on what happens!

SwordGuy

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #3 on: March 25, 2018, 12:20:21 PM »
Here are my thoughts:

1) He knows how to contact you, but hasn't. Which means,

2) He's disappeared, for reasons best known to him. Which means,

3) No money is likely to come.

BTW: Europeans know how to make wires. A 'mistake' on a wire transform for them is like a 'mistake' when writing a check here in the USA. They were stringing you along the whole time. He knew the entire time that he'd not be paying the bill, so of course he was 'surprised' that the wire hadn't gone out.

What you chose to do now will determine what you benefit from this event. You have two choices:

1) Do nothing. By doing nothing, you get no money and no experience, other than being walked on and being a victim in the classic sense of the word.

2) Track him down. You may not collect, buy you will gain a lot of experience in how people are and how the world works. This could be very useful experience that you look back on for the rest of your life. It could be a great story to tell the kids and grandkids.

You do still have some leverage, so you have to use it. The time for being nice is over. I would suggest the following:

A) Contact NYU. Make a formal complaint to the department where he studied, or his contacts. How was he admitted to NYU? Direct application or through a program? Did he take English language classes the year before enrollment? Check at the English as Second Language dep't. Or was he also a PhD. student? Find his co-workers/professor there and tell them very concisely that he owes you $X and you need to get in touch with him. Maybe they can contact him and let him know that you are looking for him? Say you might be forced to go to the police, but you don't want to, all you want is your money. Appear calm, rational, yet dead serious. This is your best case scenario; you can potentially poison his contacts in the USA and thus negate a huge side-benefit for his studies in the USA.

B) If 'A' doesn't work, go to the police and make report. Put it on the record. Get a copy of the report once it's finished.

C) With that report, contact the American embassy in his home country, Spain. File a complaint there. They won't do anything as they aren't debt collectors. But, the next time he needs to get his entry docs for the USA filled out, he might have a problem. Europeans who are members of the upper class (as you suggest), want to be able to travel freely to the USA, if nothing more than to shop and go on vacation every few years or so. He'd have a hard time explaining why he can't go on a family vacation.

D) While doing A & B, try and find as many people in Spain who know him, start with Facebook. Tell them in simple English who you are looking for any why. Tell them that you might have to contact the American embassy and file a complaint if there is no resolution. Continue by saying that he'll never be allowed back in the USA, you don't want to do this, but you have no choice. He has forced you to do this. Maybe they can help?

Don't waste money on lawyers or private detectives. You'll be "throwing good money after bad".

Keep us posted on what happens!

I like the way you think.

SC93

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #4 on: March 25, 2018, 03:15:40 PM »
First of all, this was a VERY cheap lesson..... not for him but for YOU! Hopefully YOU learned something and put it to use next time. You need a rule like I put in place in my cleaning business..... no payment, no clean. But wait.... I'll have payment Friday.... great, you can have your house cleaned on Friday. Or in your case, you can have your lesson taught on Friday. Bottom line.... no payment, no service, no exceptions. Might you lose a customer? No, a customer pays. You might lose a scumbag and that is a great thing!

Here is the funny part of the post: One time, the ATM refused to give him money, and he said that he believed he had withdrawn too much that day.
(I believe this to be true; the student appeared to me to live an astonishingly expensive lifestyle.)

Do you think that means someone has money? If you do, you are wrong. A lot of people that live like that screw people over just like this person did to you because they don't really have the money to do the stuff they are doing.

Moonwaves

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #5 on: March 26, 2018, 03:39:11 AM »
The easiest, not free but relatively inexpensive, next step is to send a registered letter with an "overdue invoice" type letter, request for payment and details of the additional fees/penalties you will have to add to the invoice and by how much and when these amounts will increase. You may need to check if there are limits on what you can legally charge. Once you know that they have received the letter the clock starts ticking until the next one is sent. I think here we can send two reminders and then a final notice, again you should check what is applicable in New York.

I've only ever had one problem with receiving payment and it took about seven months to sort that out. It turned out though, that the woman in question had changed accounting software just after she received my invoice and it fell through the cracks somehow. She would normally have caught the error but was pregnant and just about to have a baby and missed it. Then was essentially not working for several months. As it was the first time something like that had happened, I just sent a few email reminders and tried phoning and then just left it for months. I don't think I'd do that again. The longer you leave it, the more difficult it seems to be to chase it again.

former player

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #6 on: March 26, 2018, 06:24:57 AM »
bwall has set the situation out very well.  Lawyers and private detectives aren't going to help you here: your only practical weapon is shame, to be escalated as necessary.

The only thing not suggested by bwall that I would add is sending an email to the director of finance (or equivalent) at Ares Capital with a copy of your invoice asking them to pass it on to Senor Espinos, as it has by error not yet been paid through the arrangements previously in place.  If that doesn't work, then escalate as bwall suggests.
Be frugal and industrious, and you will be free (Ben Franklin)

Malkynn

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #7 on: March 26, 2018, 06:52:27 AM »
I’m still astonished that you never got to the point of demanding payment up front from this guy.
I mean, after one walk to the ATM I would have said “next time you go to the ATM before our session, or you start paying me for my time to walk there with you”

Know your worth and don’t be afraid to ask for money up front, especially from people who have failed to pay you promptly before.

ePalmtrees

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #8 on: March 26, 2018, 05:21:28 PM »
I think you are screwed. I once took an ex-roommate to small claims court in nyc. She didn't show up so the judgement was automatically for me. But in order to get any money I had to figure out where she worked in order to get wages garnished and that's a whole different process. Since she was a nutter that was difficult. So even if you get a judgement, you still have to jump through hoops and it's work to actually get the money. The other roommate who also got a judgement and I both just ended up giving up. And she was still in the same city.

electriceagle

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2) Track him down. You may not collect, buy you will gain a lot of experience in how people are and how the world works. This could be very useful experience that you look back on for the rest of your life. It could be a great story to tell the kids and grandkids.

If you take this approach, make sure to use a Sam Spade accent the entire time. At you will get some entertainment out of it.

Most people who do this simply don't have the money. Getting blood from a stone is tough. Blood from a foreign stone? fuhgeddaboutit.

Kakashi

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I'm going to go out on a limb here and say that the money you were making off this student was good, so good that you're willing to put up with all the walks to the ATM and whatnot?  That you didn't want to lose this client by making a stand? 

lhamo

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I seriously doubt you are going to get paid.  You should have cut him off the first time he wasn't able to pay you in time.  And then when the wire didn't come through.

I think you will get a better return on your time by seeking out new tutoring clients.  Spend an hour or two setting up a firm payment policy, too. 
Wherever you go, there you are

Dragonswan

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #12 on: June 06, 2018, 11:46:38 AM »
I agree you won't get paid, but by all means try the avenues suggested.  If/when those don't work, you can at least write this off on your taxes.  You'll have to look up how to do this as the procedure has probably changed since I had to do it (believe it or not I called the IRS and actually got a live person to give me very good instructions).  If it was a really large amount you'll have to write it off over several years.

wbranch

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #13 on: June 07, 2018, 01:24:24 PM »
I agree you won't get paid, but by all means try the avenues suggested.  If/when those don't work, you can at least write this off on your taxes.  You'll have to look up how to do this as the procedure has probably changed since I had to do it (believe it or not I called the IRS and actually got a live person to give me very good instructions).  If it was a really large amount you'll have to write it off over several years.

The OP is likely a cash-basis taxpayer and never included this as income so there is nothing to write off. Business bad debts for accrual basis tax payers are fully deductible in the year they are determined not to be collectible.

It sounds like you had a "non business" bad debt that was deducted as capital loss.

Bicycle_B

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Re: How to get a client to pay? Or: do I need a private detective/lawyer?
« Reply #14 on: June 19, 2018, 07:54:29 PM »
@bwall, awesome reply! Impressive plan.

@mathstach, did you follow up or decide to move on?

Either way, you can use this story going forward. "I once had a client who tried not to pay. His family is associate of the King of Spain, but that student doesn't attend this university any more. My clients pay up front because they pay for the best..."