Legal Question in Business Law in New Jersey

Re: Nonpaying Customers, what are my options?

I just wanted to clarify my earlier response in which I omittted a very significant fact about filing a lawsuit to colect money owed.

If your business is a corporation, an LLC, LP or some other types of entiities, you aren't alllowed to file the lawsuit papers yourself. Those entities are required to be represented by an attorney.

I didn't want you to go all the way down to the Courthouse, fill out all the papers and when the Clerk saw "Inc." after the plaintiff's name, told you that for the first time.

Re: Nonpaying Customers, what are my options?

Contact me if you wish to discuss the particulars of your case; I am licensed in both NJ and MA with an office in MA. I will need the checks or copies of the checks rejected for NSF.

Re: Nonpaying Customers, what are my options?

The problem that you describe can be controlled. I have a client who is a merchandise importer and wholesaler. He sells in all States to retailers of varying size. A few years ago, he approached me with a nearly identical problem. I met with his senior management and we were able to develop a program with several facets that successfully reduced his aging receivables by 80% with only minor recurring legal expenses. I still do work for the same client but not on routine collections; they take care of themselves. I can't promise you the same results but if that sounds interesting to you, call or email. Perhaps I can do the same kind of thing for your business.

See also: http://info.corbettlaw.net/lawguru.htm

Re: Nonpaying Customers, what are my options?

This tactic may have no effect on this debtor but for the cost of a certified mail letter, it's worth a try. Our NJ State Law Library site is down at the moment but if you go to this link, it will take you to the table of contents of the NJ Statutes.

http://lis.njleg.state.nj.us/cgi-bin/om_isapi.dll?clientID=78068&depth=2&expandheadings=off&headingswithhits=on&infobase=statutes.nfo&softpage=TOC_Frame_Pg42

The statute you want is 2A:32A-1. You can either enter that in the search box or click on the "X" alongside Title 2A. Try the search box first because 2A is a very long statute and it will take a while to navigate to 32A-1.

That statute provides a form you can copy and send to a person who has given you a check that was dishonored for insufficient funds or no account. As you'll see, it notifies the person to make good on the check within 35 days or you will file a lawwsuit (in addiion to a criminal complaint) for up to 3 times the amount of the check. If that shakes him up enough to pay, great! If not and you do want to sue, just go to the courthouse in the county where the check was tendered, presumably, your place of business and find the Clerk of the Special Civil Part. They are usually very helpful.

You can write out the Complaints for the lawsuits right there and the Clerk will mail them to the "maker" of the check by certified mail. If they don't pay and don't Answer the Complaint you can obtain a default judgment against the maker.

The rwo problems are: (1) who is the maker? (the Buyer's business I would supppose and (2) collecting on the judgment. If you get that far, write agan and perhaps I can give you a few ointers on how to to do that against an out of state debtor.

Good luck.

Re: Nonpaying Customers, what are my options?

There are no easy choices. The amount is small and is probably not worth your time to file suit. If you file suit in MA, you or an employee will be needed to testify in court. Is this the best use of your business resources?

If you are looking for an MA attorney, my brother in Law, Michael Mulcahy http://www.brookssanbornmulcahy.com/profiles/3235753 practices in Springfield.

To solve the problem in the future, why don't you arrange for a merchant account to accept credit cards and checks by phone?

I hope this helps!

Ron Cappuccio