Deadbeat - Do I Have Any Hope Of Collecting The Money?

Bluepenguin

Hello,

I'm new to the forum, so quick introduction - I run a small electrical company in Calgary, Canada, and been in business for 3 years. I'm looking for help, and really glad these forums exist...

We've done work for a client in fall 2007 - work that he never paid for. He still owes us $10,000, and I'm losing hope we'll ever see this money again.

The client is a custom home developer south of the City, and I recently found out his home and remaining undeveloped lots went up for foreclosure. We had enough sense to place a lien on the property (there was a long string of people preceeding us, with claims up to $70,000).

I am at a complete loss as to what to do now - the amount is small enough that if we were to go through a lawyer that alone would probably eat up most of the money. I'm fortunate enough to never have had to deal with something like this before. Would anyone have any suggestions as to what we can do next? How do these things usually go over?

We have not been notified of anything regarding the foreclosures (In fact I am not sure if this particular property was included) and I do believe there is a 3 month window in which the lien is valid. Again, correct me if I am wrong... I feel like we are running out of time and need to find out our options.

Any input would be much appreciated.

SelfContract

Think about these steps:

1. He filed for Bankruptcy.

2. You will put a lien on house.

3. His BK lawyer or BK Trustee from court will contact you, arrange your company name to be on Creditors' payment list.

After all, maybe you can recoup 30%-50% of that 10K amount (paid in monthly installment??) ... is the most I can see you squeeze out of any BK court process.

Everyone else also got their "proportionate" piece of his asset pie ---10%, 20%, 30%, 40%, etc.... small gets small, big gets bigger, etc.. accordingly!


(..Unless he has NOTHING LEFT to sell ?? houses, boats, equipments, stocks, bonds, savings, etc.)

Bluepenguin

It's been a while, and we're on the bottom of the food chain, lien-wise (this thing is thick) ... Nobody has contacted us, should I go to the registries office and ask them? Who do *I* need to contact in this case? The phone is not ringing...

Alternately, we thought of sending the collections after him.. at least make his life hell... we're completely prepared not to see the full amount already...

xkv8r

In a situation like that ,if it is foreclosed on , Bank will take the money first,what ever is left over you will have to fight the other subs for and may only get a percentage.Liens are worthless unless they are trying to sell the home but if it is in foreclosure forget it.If you sue you will get about 30% if you are lucky,plus time off to go to court ,lawyer etc.If you do win in court they problably still won't pay,( If it was the other way client over contractor ,the court would problably seize your bank accounts,come to your house and take equipment as payment.Court thinks, If homeowner doesn't pay thats fine , but if we owed the money and didnt pay we are criminals.

Double-A

I have no idea how Canadian law works in this type of case, but if its anything like the laws we have here, you must move to perfect that lien before your window expires or you will no longer have a lien in place.

Get some advice from an attorney on how to proceed next. Don't waste time. You many not have much time left in which to start acting to preserve your claim.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Bluepenguin

Geez, there is over 1 million in mortgage alone.. the other subs are listed at 68K, 70K, it goes on... we're literally last with our paltry 10 thousand.
Thanks for clearing up the foreclosure vs. selling. makes sense... Keeping this in mind I'm not even sure if its work the bother to pursue it this way. Do you guys think sending the collections after him (outside of the lien) would work?

Thinking we should do a credit scan prior to taking on large jobs from now on...

On a side note, this just makes me sick. Us smaller companies can get tanked with just one deliquent client. And there doesn't seem to be anything in place to protect us.

Stone Mountain

Blue, I've been there, done that. The MOST important thing is to pay for an hour's consultation with a construction law specialist, NOT a regular lawyer. There is a Huge difference in knowledge base. First off, you have to "perfect" your lein. Second, make sure you are on the list of creditors. A lein should give you prefered status.
Some years ago, we were about 5th in line on a $800,000 house. It went to court, and the house was forced to be sold. I got all my money, plus costs and interest. No lawyers. I placed the lein myself.

In Ontario law, if you place a lein on a property and there are already some there from the same basic project, seems like you are part of the main job), your lein is protected under the first lein. If there are other lein holders, at some point there will have to be a creditor's meeting, and the trustee has to act on this. Preferred creditors come before any others, and with a lein, you will be preferred (behind the bank, of course).
However, your laws may be different, so that's why I suggest a lawyer. $10,000 is a LOT of money to walk away from. I wouldn't.

__________________
Residential Deck Specialist: Vist our Website
www.fenceanddeck.ca

Bluepenguin

Thanks, will have to find a construction lawyer very soon then. We placed the lien January 16th, so time is really running out... What irks me is that I found out about the foreclosures through a complete fluke - by browsing MLS listings!!!

Susan Betz

Talk about looking in the right place at the right time!

__________________
Fences of Distinction, Ocala, FL
http://www.fencesofdistinction.com

Bluepenguin

Susan - I know!!! You should have seen my face...

I just called a few companies listed on the lien - and found a lawyer that dealt with one of the larger claims. Fingers crossed...

AtlanticWBConst

Smart.

__________________
- Build Well -

Cole

Good luck! Let us know how it turns out!

__________________
Tulsa's Leader in Outdoor Living Construction | Facebook | Tulsa Pergola Builder | Tulsa Outdoor Kitchens

copusbuilder

Just be careful with the attorney. You don't want to end up $10,999.00 in the hole.

Doesn't sound like you have much of a chance and knowing lawyers they love to tell you what they can do and when it doesn't work they say "Oh well we tried?"
My sons an attorney and outside of him they all suck.....and I usually keep this quiet!

__________________
www.copusconstruction.com
www.etexasrentals.com
www.thelakevoice.com
AkA Richard Cranium

Stone Mountain

Karma!

In December I needed an extra plow truck, desperately. I went on a Saturday to a grand opening of a car tuners shop, and got talking to someone about their car. I gave him my card as a courtesy, he looked at it, then looked at me and said "you do sowplowing! do you need anyone else? I have an 07 Ford with a blade!" Karma, again!


By the way. Don't let anyone talk you out of seeing a lawyer. I know we all hate them, and God knows a few of them have been amongst my worst customers, but a construction law expert will be able to advise you properly. I've got a case right now for $25,000 (clear case of fraud, but I won't go into it). I have a perfected lein on the house and in another 3 months we'll be able to force the sale. My lawyer came up with so many little tips and tricks that the client was spinning. She hired a general practioner, and he's in way over his head.

__________________
Residential Deck Specialist: Vist our Website
www.fenceanddeck.ca

Bluepenguin

No worries, I will do an initial consultation and feel out the situation...that is if this lawyer even calls me back...

copusbuilder

I would be the first to agree with the attorney.....if there is a case. From what I am hearing you are #20 or so in line?

As you have said, talk with him but beware, they love to take your money.

It sounds as though you know that "but" some people believe everything an attorney says and end up deeper in the hole. Sift through what he says and make an intelligent decision based on fact not emotion

__________________
www.copusconstruction.com
www.etexasrentals.com
www.thelakevoice.com
AkA Richard Cranium

Bluepenguin

Update - I got a hold of one more company listed on the lien, and they provided all the information I needed. He said to not waste my time on a lawyer right now - they've been averaging $4000/month - on top of their 80K hole! Apparently the properties have not sold in the foreclosure yet, but the moment they do, everyone on the lien will be notified...

He was more than talkative...I actually found that everyone I called was very happy to be contacted..

McMasters

We use a seasoned construction collection attorney who works for a fee based on a % of money recovered, which means you are not paying out of pocket for his attempt to collect.

The lawyer will let you know right up front if he thinks you have a chance to get money and then he works harder to get your money to increase his pay day.

Hope you get the money.

Buckknekkid

there should be a Toronto Deadbeat list.. Cardoza, Drain Source, Tony Mattar, they should all be on it.