Legal Question in Business Law in California

Re: unpaid tutoring invoice

This is a great question although it is really more of a business question than a legal question. I always tell clients that a problem like this is a fabulous opportunity because you've identified an area of your business where you need to develop a strategy. This is a great time to ask yourself about how much business risk you have from non-paying clients. For instance, if this is a really unusual case and you would lose clients by asking for payments up front, you just need a collections plan and perhaps some good form letters (e.g. 30-day big ugly red stamp, 60-day letter, etc.). On the other hand, if most clients would be willing to pay up front, you might want to adopt a strategy requiring payment at time of service unless credit arrangements are made. This is also a great time to evaluate your contracts and make sure that you will have the easiest time possible enforcing them. What is your limit for debt where it becomes worthwhile to pursue collection and when should you just write it off as a bad debt? Do you want to engage a collection company or is that just another expense? As for this client, I would wait until the next billing cycle and send a letter indicating that you expected payment within 30 days and that continued non-payment will require you to consider referral of the account to a collection agency. You might also indicate that they need to contact you if they need to arrange for a payment plan. Sometimes people have a cash flow emergency (e.g. unplanned medical bills) and don't know how to handle debts they can't immediately pay. They often appreciate being offered a friendly option. If your contract provides for late fees or interest, tack those on.

Re: unpaid tutoring invoice

Send them a bill and inform them that you will be adding interest on the unpaid balance as laid out by the California Courts...also...maybe offer them a payment plan (maybe there's a hardship you are unaware of)

If this does not get them to pay, then you may have no other option than to file a small claims action for payment. This, by the way, will include interest at 10%, as well as court costs. Their $1000 will turn into $2000 to $3000 almost immediately...maybe this will prompt them a little too.

Good luck, let me know if you need any assistance, I also run a collection agency at CVFinancialGroup.com.

Scott